Lupin Ltd. share price target

Lupin's revenues increased 41% YoY to Rs 44.4 bn in Q1FY17 in line with our estimates of Rs 44.1 bn on back of better performance in US, Kyowa APAC, LATAM and ROW business. Operating margins increased by 354bps YoY to 29.4% (higher than our estimate of 29.1%) aided by operating income of Rs 1.3 bn. Net Profit grew by 55.1% YoY to Rs 8820 mn as against our estimates of Rs 7227 mn.

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...

Lupin's (LPC) 1QFY17 revenues of INR44.3b (+41% YoY) were in line with our estimate. EBITDA margin of 29.5% was ~300bp below our estimate due to lower-than-expected sales from gGlumetza, one-time impact of ~1% from accounting of Gavis inventory at fair value and higher employee costs (+42% YoY). However, PAT of INR8.8b was higher than our estimate due to a lower tax rate of ~23% in 1Q (full-year guidance of ~27-28%). Motilal Oswal maintain Buy with a TP of INR1,850 @ 23x FY18E PER (v/s INR2,000 @ 25x FY18E PER). Their EPS estimates largely remain unchanged.

USFDA Open Form 483 (Mar'16) for Goa unit: Management expects clarity from the US FDA over next few months. The Company has already given monthly update to the US drug regulator. LPC has already received Establishment Inspection Report (EIR) for first set of observations (against Form 483 issued in July 2015 to its Goa facility) and also tentative approval from the US FDA. Though the issues are not seemingly contentious enough which...

After a 20-25% fall from its peak, we believe most of the negatives are priced in for LPC and present a great opportunity to BUY this stock at attractive valuations (under 20x on FY18E EPS).

Lupin Limited headquartered in Mumbai is Indias seventh largest Pharmaceutical Company in terms of market capitalization and the fifth largest company in the United States by prescription led market share. The advent of the 21st century ushered the need for strong vision and solid values in the pharmaceutical industry. Following the path of conventional economics where demand creates supply, Lupin has emerged as the best fit with a vision to excel...

For 4QFY2016, Lupin posted results above our expectations. Sales came in at Rs4,091cr (V/s Rs3,665cr expected), up 34.0% yoy. Sales growth was driven by Formulations (Rs3,807.5cr) which rose by 38.6% yoy, while API (Rs283.8cr) witnessed a dip of 7.7% yoy. On the operating front, the EBDITA margin came in at 31.2% V/s 25.1% in 4QFY2015 and..

9 Exclusivity in gGlumetza and price spike in gFortamet resulted in +ve surprise of US$85mninUSsales(to$325mn).Thus17%salesoutperformancetoourestimates. 9 450bpspositivesurpriseintheoperatingmarginof32.7%(vs.estimated28.0%)primary...

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...

4Q numbers came in above expectation: Lupin's 4QFY16 revenue grew 37% YoY to INR41.8b (11% beat) primarily due to strong beat in US. EBITDA improved 79%YoY to INR13.7b with EBITDA margins at 32.7% v/s 25% in 4QFY15 (despite high R&D;...