Lupin Ltd. share price target

Company Outlook and Guidance: We have confidence in Lupins business and its long-term prospects, which is supported by these factors: 1) New launches in the US market like Darunavir, Cynocobalamin, Diazepem Gel, Vereniciline, Bromfenac, etc.

Lupin’s Q1FY24 result was boosted by better performance in India and the US, and milestone income it received from Abbvie (USD 25mn). Sequential growth of 3% in the US was driven by Darunavir, while the acute portfolio is unlikely to have seen traction from the drug shortages in the US.

Q1 a beat with revenue/EBITDA running 8%/25% ahead of consensus; gross margin improves to 65.9% (64.4 ex-licensing income)

Recommendation: We recommend a BUY rating for a target price of Rs 990/share, implying an upside of 10% from the CMP.

Lupin is the first company globally to receive the final approval of the USFDA for US$1.264bn inhalation drug gSpiriva (Tiotropium Bromide). We factor in US$100mn revenue from this drug in FY24E.

We believe both these products could increase the gross margins by 100 bps in next two years. We have increased our target price to Rs 950 (from Rs 825) with Buy recommendations.