Lupin Ltd. share price target

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).

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

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

Lupin reported a mix set of earnings where sales were 4% below our estimates at Rs. 4,895 crore. EBITDA was 4% below our estimates at Rs. 997 crore, while adjusted PAT was in-line with our estimate of Rs. 561 crore.

Niche product approvals and a strong pipeline of new drugs could drive Revenue/PAT CAGR by 10%/19.5% over FY24E-FY26E. We maintain our BUY rating with a Target Price of Rs 1,770/share.

Lupin has recently received approval for a generic version of Oracea (Doxycycline Capsules) in the US market. The company has received approval for 40MG in the US, which is expected to have sales of $128 million in the US market. Lupin has a healthy pipeline of complex generic products in the US market which would aid the company in achieving quarterly US sales of $200-220 million.