The 38 reports from 12 analysts offering long term price targets
for Lupin Ltd. have an average target of 961.45. The consensus estimate
represents a downside of -3.68%
from the last price of 998.15.
LPC received approval for gProAir HFA (Albuterol Sulfate) that offers a revenue opportunity of US$140-155m over next 8 quarters beginning from 2QFY21E. The total market size of Albuterol Sulfate Inhalation Aerosol is US$2.9bn of which 44% market share is held by ProAir. While there are 9 companies in Albuterol (including 3 AG, 6 generics), LPC and Perrigo are the only generics in gProAir and plans to launch their generics in Aug CY20. We expect LPC can potentially have 5% Rx share of the Albuterol Sulfate...
Lupin Limited is a multi-national pharmaceutical company based in Mumbai. The company specializes in branded and generic formulations, API's and advanced drug delivery systems in the area of biotechnology. The...
Lower US sales due to seasonality & metformin recall; India affected due to lockdown: Lupin's India sales declined 1.7% YoY (up 7.8% QoQ, 37% of revenue) due to lockdown which primarily affected its acute therapies. North America declined 21.1% YoY (down 23.0% QoQ, 35% of revenue) due to lower sales of seasonal products like oseltamivir, recall of Metformin & lower sales of Azithromycin, apart from COVID impact. EMEA de-grew 4.0% YoY (down 31.5% QoQ, 7% of revenue) while Growth Markets declined 5.8% YoY (down 3.6% QoQ, 8% of revenue). ROW declined 46.0% YoY (down 17.3% QoQ, 1% of revenue). API revenue, however, rose 17.2% YoY (up 24.5% QoQ, 12% % of revenue)....
We reduce our FY21 EPS by 7% to factor Q1 miss but keep FY22 estimates largely intact. We increase our TP to Rs980 based on 22x FY22 EPS (from 21x earlier). Upgrade to Buy. We upgrade Lupin to Buy premised on: a) recovery in US business led by gProAir approval (imminent) and ramp up in Levothyroxine; b) bounce back in India growth (solid franchise, chronic skewed portfolio); c) operating leverage to aid margin expansion of ~500bps over FY20-22e. Management commentary was positive, indicating normalization of US business, continued cost reduction efforts as well as good progress on complex/specialty pipeline. With monetization of key assets, resolution of key facilities and margin levers in place, the business is set to post strong earnings growth of ~50% CAGR over FY20-22e.
Lupin's 1QFY21 revenue at Rs35,279mn is down 8.3% QoQ and 20.2% YoY and lower than our/consensus estimates by 6.9%/6%. US sales, which declined by 23% QoQ, led to the underperformance. EBITDA stood at Rs4,881mn, down 43% YoY. EBITDA margin (excl. other income) stood at 14% - higher by 18bps QoQ and lower by 563bps YoY. QoQ improvement in EBITDA margin was led by lower other expenses. This was partially offset by higher COVID related expenses (higher freight costs) and higher employee expenses due to restructuring of the specialty organization in the US. Net profit for the quarter stood at Rs1,069mn and was adversely impacted by higher effective tax rate (60%). US sales to normalize in 3QFY21 We build US$120mn addition to base US sales (US$760mn) by FY22...
Outlook & Valuation: We downgrade our revenue estimates by 1% for FY21E to Rs. 168 Bn on account of downgrade in India and other key markets while we upgrade by 0.4% to Rs. 187 Bn on account of upgrade in key markets.
1QFY21 revenue and PAT was impacted due to decline of US biz (26% QoQ CC), India formulations (2% YoY) and higher effective tax rate of 60% v/s 25% QoQ. Sequential decline in US (Gx) was led by Metformin (extended release) recall, seasonality effect and normalization of sales as 4QFY20 had stocking benefits. While India formulations were impacted due to lockdown, we continue to remain positive on LPC and believe 1QFY21 was one-off...
R&D; investment dips to 10% of revenue since peak of 13.5% in FY17 Investments in R&D; was largely flattish in FY20 to Rs15.5bn, that is 10% of sales down from 11% in FY19 as part of cost optimization program. We highlight major products/pipeline spend of R&D;: Lupin received approval for Nepexto (biosimilar Enbrel) in Europe...
Outlook & Valuation: We downgrade our revenue estimates by 7.5% for FY21E to Rs 169.6 bn on accountof downgrade across regions while we introduce FY22E revenue estimates atRs 186 bn.
BPCL: Inventory losses sink earnings. ARBP: Strong Q4; upside risk to EPS can support higher multiple. LPC: Lupin/Mylan win approval for biosimilar Enbrel in Europe. TRPC: Difficult Q4; growth recovery a few quarters away
Maintain Add, risks: We increase our TP to Rs920 based on 21x FY22e EPS. Key risks: delay in resolution of key plants, delay in key approvals, higher price erosion in the US, adverse outcome on drug price-fixing lawsuit in the US, escalation of NDMA issue in Metformin. Lupin reported steady revenues led by good traction in India, US and API business. While margins improved (13.7%, +228bps QoQ, lower R&D; spends) and recovered from Q3 lows, they still remain subdued and below our expectations. Lupin has been guiding towards an improving cost structure, however, benefits of those are yet to be seen. Going forward, we factor significant gains from operating leverage to aid margin expansion driven by key launches viz. gProAir, Levothyroxine ramp up and several cost containment measures (stable R&D;, lower SG&A; spends, savings on Solosec). With improving profitability and moderate capex (slightly higher than Rs5bn), we expect FCF generation of ~Rs40bn over FY20-22e. We raise our earnings by 12-18% for FY21/22 to factor slightly higher margins, lower depreciation and tax rate. Revise TP to Rs920 based on 21x FY22 EPS.
Outlook & Valuation: We downgrade our revenue estimates by 7.5% for FY21E to Rs 169.6 bn on account of downgrade across regions while we introduce FY22E revenue estimates at Rs 186 bn.
Lupin's 4QFY20 revenue at Rs38,457mn is up 2% QoQ and down 12.7% YoY. The top line is higher than our/consensus estimates by 2.2%/1.6%. Net profit for the quarter stood at Rs3,896mn. The net profit was driven by higher other income (net forex benefit of Rs1260mn), exceptional income of Rs830mn (net gains from business divestment) and lower amortization charge (lower by Rs390mn QoQ). The effective tax rate was lower at 25% vs guidance of 40%. EBITDA stood at Rs5,253mn, down almost 40% YoY. EBITDA margin (excl. other income) stood at 14% - higher by 300bps QoQ and lower by 614bps YoY. The QoQ improvement was partially...
30 May 2020 Revenues in 4QFY20 were down 1.1% YoY to INR38.5b (v/s est. INR41.4b), due to decline in US sales, partially offset by growth in the DF business. US sales were down 13.5% YoY to USD212m (42% of sales). APAC sales were down 16% YoY to INR1.4b (4% of sales). On the other hand, DF sales (31% of sales) were up 13.3% YoY to INR11.9b. Also, EMEA (Europe, Middle East and Africa) sales were up 7.4% YoY to INR3.5b (9% of sales).
Metformin recall to be limited in few batches only We expect US business to get back on track and lead the growth for LPC over FY20-22E due to 1) resolution of Somerset, Goa and Pithampur (Unit-2) in FY21E 2) early launch of Albuterol 3) ramp up of Levothyroxyn 4) launch of complex injectables, Biosimilar and Spiriva in FY22E. LPC guided for EBITDA...
Resolution of Goa and Pithampur (Unit-2) holds the key. We upgrade LPC to Buy' (earlier Reduce) with TP of Rs978 (earlier Rs685). We assigned 24x PE (earlier 22x) on FY22E due to better earnings visibility from the US market led by easing of regulatory issues. We increase our EE by 31% for FY21E-22E led by US revenue growth of 10-15% constant currency (earlier 5-7%) and EBITDA margin expansion of 200bps due to savings from...
On the business front, despite the nationwide lockdown, domestic growth is expected to remain more or less stable. Exports growth, barring for one or two months due to congestion in all major ports globally, is also expected to remain strong due to 1) currency benefit, 2) slowdown in competition due to delay in new approvals that will be beneficial for existing players and 3) expected demand continuum across the world despite Covid-19. Some windfall is also expected in some critical productsa case in point is Hydroxychloroquine, a malaria drug that is likely to be repurposed as a prophylaxis for Covid-19 treatment in some cases....
