Lupin Ltd. share price target

LPC's OTC carve-out won't significantly impact financials, but aims to double OTC sales by sharpening focus

Lupin's (LPC) Q4FY25 EBITDA was at Rs13bn (up 30% YoY) ~10% beat to our estimates on the back of higher US sales supported by niche launches. GMs improved YoY. LPC saw remarkable turnaround in profitability with ~2x jump in EBITDA over FY23-24 aided by better product mix, continued niche launches in the US, clearance from USFDA for facilities, domestic formulations regaining momentum and cost optimization measures. We expect margins to sustain given a strong pipeline in the US. Our FY26E stands increase by 5% as we factor...

Lupin (LPC) delivered slightly better-than-expected revenue, EBITDA, and PAT for the quarter (4% beat). LPC continues to track well in the US generics segment (40% of 4Q sales), clocking the highest quarterly run-rate of USD245m over the past 24 quarters.

We maintain our BUY rating on the stock.

US sales cc quarterly run rate at its highest-ever level of US$ 235mn, expect to inch up to US$ 250mn in FY26E and US$ 280mn in FY27E

In Teva’s litigation with Amneal which blocked Amneal’s launch of gProAir, the US Court of Appeals had recently asked Teva to delist its patents in contention. While the ruling was expected to clear the way for Amneal’s launch of gProAir, Teva has now filed a petition seeking an en banc rehearing.

LPC's domestic region in-licence portfolio fell from 15% in Q2FY24 to 12% in Q2FY25 and is expected to reduce further to ~10% by FY26

We recommend a BUY rating with a target price of Rs 2,600/share.

Lupin’s 2QFY25 EBITDA/Adj PAT were 18%/26% ahead of our estimates (the magnitude of beat was broadly similar vs street estimates).

LPC's earnings were in line with our estimates but beat street's estimates. EBITDA margin was 23% in Q2FY25

We have BUY on the Stock

Q1FY2025 numbers were strong, beating our estimates on all fronts. Sales grew by 16% y-o-y to Rs. 5514 crore (9% above our estimates), on a 28% y-o-y growth in North America region to Rs. 2041 crore.

LPC delivered a strong earnings beat in 1QFY25, led by a superior show in key markets (US/India), lower R&D spending and a low tax rate.

Lupin’s recent success in US (sales grew ~34% YoY in FY24) is driven by its better regulatory track record and traction in inhalation portfolio. Share of inhalation products has risen from 25% of US sales in FY22 (USD 185mn) to 40% in FY24
(USD 326mn) post the launch of gSpiriva. In India, growth had been subdued due to the discontinuation of in-licensed brands (contribution down from 15% in FY23 to 11% in Q4FY24).

LPC delivered a healthy operational performance in Q4 with largely in-line revenue/PAT; higher tax impacted net profit

Lupin (LPC) delivered in-line operational performance in 4QFY24. LPC ended
FY24 on a strong note, with INR198b in sales (up 19% YoY), EBITDA margin of
18% (up 750bp YoY) and PAT of INR19b (vs. INR4b YoY). LPC continues to
implement efforts toward building a complex product pipeline in inhalation,
injectables and ophthalmics.

We have BUY on the stock