Lupin Ltd. share price target

Management has guided for pain to continue until FY19 in the US markets and some delays in launches but is confident on continuous launches from India/Somerset with a focus on 30+ launches in FY18/19E to support the base business. India business to grow ahead of IPM, however, pain in Japan on the back of new norms. Lupin also has a strong NCE pipeline but...

Higher Price Erosion to Impact US Business Lupin (LPC) has delivered a weak performance in 4QFY17. Its revenues rose by just 1.7% YoY to Rs42.5bn, while adjusted PAT declined by 12.7% YoY to Rs7bn. Lower US sales at US$276mn (vs. our estimate of US$336mn owing to drop in gGlumetza/gFortamet sales) and lower channel filling for gMinastrin 24Fe dragged its top-line performance. However, its domestic sales grew by 13.8% YoY Rs8.8bn, while Japan business surged by 41.8% YoY Rs4.9bn. LPC booked two oneoff expenses i.e. forex loss of Rs1.7bn and Rs1.6bn provisioning towards patent litigation loss in Australia, adjusted for which its EBITDA dipped by 19% YoY to Rs11.0bn, while adjusted EBITDA margin stood at ~26%. Its R&D; spend rose to ~16% of sales in 4QFY17 vs. 12.9% and 12.5% in...

Q3EBITDAgrowth of 44% YoY was 20% above our and consensus estimates, however higher tax rates of 39% (vs. 25% assumed as guided; now guidance revised to 28%) resulted in largely in-line PAT. While strong growth in US (8% QoQ) was led by improved market share of gGlumetza; growth in India (12% YoY) a..

For 3QFY2017 Lupin posted results much better than expected on sales and OPM fronts. In sales, the company posted sales of Rs4,110cr v/s Rs4,000cr expected yoy growth of 31.3%. The strong sales growth was aided by the USA (contributed around 49.0%), which registered a yoy growth of 57.6%. On EBITDA front, the company posted EBITDA of 25.9..

Revenue rose by 4.6% to Rs. 4404.94 Cr in Q3FY17 when compared to the previous quarter. Also, it increased by 31.48% when compared with Q3FY16.

Background: Amongst the largest Pharma companies in domestic market with Net Sales of INR 112.9bn with a strong brand portfolio. R&D; cost is in excess of 8% of Sales. Exports account for 73% with Developed Markets (DM) at 58% and EM at 15%. Sales Mix: API - 10%, Domestic Formulations - 25%, DM Formulations - 56%, EM Formulations - 9%. Historically strong in anti-TB segment, has built expertise in fermentation based products and segments like...

Lower than expected R&D costs (12.9% of sales vs. 14% expected) led to a surprise beat in margins (27.1%) in 3QFY17. Boosted by this, earnings grew ~20%YoY to Rs 6.3bn, despite higher taxes during this quarter. Revenue performance continued to be strong and in line with estimates, growing at ~26% to Rs ~45bn. US sales grew ~58% YoY, and notably, ~9% sequentially on a high base.

ICICI Securities Ltd | Retail Equity Research Revenues grew 26% YoY to | 4483 crore (I-direct estimate: | 4351 crore) mainly on account of 58% growth in the US to | 2176 crore (Idirect estimate: | 1988 crore). Strong US sales were due to Gavis consolidation and robust sales in Metformin (anti-diabetic). Domestic sales grew 12% YoY to | 991 crore (I-direct estimate: | 976 crore) EBITDA margins improved 245 bps YoY to 27.1% (I-direct estimate:...

Total revenues were a little ahead of our estimates while PAT were inline with our expectation by 3.1%/(1.9%) respectively for Q3FY17 at Rs44 bn/Rs6.3 bn. EBITDA margin improved to 25.8% from 19.4% in Q3FY17 and 22.5% in Q2FY17 on the back of 1) better sales mix, 2) reduction in R&D; expenses, and 3) overall tightening of costs. Management guided a 26-28% EBITDA margins. Management has guided for some delays in launches like Renvela/Welchol ect but is confident on continuous launches from India/Somerset with a focus on 25+ launches in 12M to support the base business as the pricing pressure will continue. Also India business to...