Lupin Ltd. share price target

Revenues and margins lower than expectation: Lupin s revenues increased by 10 percent YoY to Rs 42.9 bn in Q2FY20 lower than our estimates of Rs 45.4

The USFDA's warning letter (WL) on Mandideep plant identified a long list of Change in Estimates | Target | Reco activities to address the operational deficiencies. Besides, LPC has to...

Lupin Limited is a multinational pharmaceutical company based in Mumbai. The company specialises in branded and generic formulations, APIs and advanced drug delivery systems in the area of biotechnology. The company...

Lupin reported revenue growth of 11% YoY to `44,906mn in Q1FY20. Growth was across most of our geographies, led by the U.S. and India.US showed 30% YoY growth while India delivered strong growth at 12% YoY. EBITDA grew by 31% YoY, due to higher gross profit...

Despite delivering strong performance in the US, we were unimpressed by the continued execution issues in getting complex product approvals - bEnbrel in EU and gProAir in US have been elusive so far. At a time when four formulation plants are under OAI or WL, these big-size product approvals have become crucial. Moreover, Solosec ramp up has been slower than expected, keeping margins in check as marketing spend continues to weigh in. Our FY21E numbers do include a ramp up in gLevothyroxine sales and the launch of gProAir and bEnbrel, keeping Rs 34.3 EPS at risk (in case of further delays). However, the branded domestic franchise (valued at ~Rs 650/sh) continues to support the downside. We downgrade LPC to NEUTRAL owing to visible execution woes in the form of (1) slow scale up in Solosec & gLevothyroxine in US, and (2) postponement of bEnbrel approval in EU. 1QFY20s performance beat our estimates led by higher gRanexa contribution. Our revised TP is Rs 760 (22x FY21E EPS) following a 17% cut to our FY21E EPS

Lupin's revenues increased by 15% YoY to Rs 44.2 bn in Q1FY20 lower than our estimates of Rs 46.0 bn on the back of tepid performance in US, India and EMEA markets.

Currently, LPC has OAI status for its 4 plants i.e. (1) Mandideep Unit 1 (No new approval pending for approval); (2) Goa (30-40% of US sales; WL also; 20 pending ANDAs); (3) Somerset (~15-20% to US sales, ~40 ANDA pending ANDAs); (4) Pithampur Unit 2 (WL; 15-20 ANDAs pending for approvals; no new filings since WL). We expect the pending US FDA issues to remain as the key overhang for the...

Sales up across segments barring API: Revenue grew 15% YoY to INR44b (our estimate: INR44.8b). US sales increased 29% YoY to USD218m (39% of sales), while Japan sales were up 18.2% YoY to INR5.9b (14% of sales) led by strong volumes traction. Domestic formulation (DF) sales grew 9.7% YoY to INR13b (30% of sales), mainly led by prescription business (+12.3% YoY)....

With benefits from the last quarter of exclusive sales of gRanexa and slower Change in Estimates | Target | Reco ramp up in Levothyroxyn sales, the adj. sales increased by by 1% QoQ due to muted growth in Japan and declining sales in US (constant currency). Adj....

Q1 core EBITDA was in line at Rs 6bn, normalised for a temporary drop in SG&A; spends and Ranexa FTF.