Lupin Ltd. share price target

LPC booked a loss of Rs. 5.2 bn in Q4 with weak operating performance and contraction in margins, EBITDA was ~50% below consensus

Lupin Limited is a multi-national pharmaceutical company based in Mumbai. The company specializes in branded and generic formulations, API's and advanced drug delivery systems in the area of biotechnology. The...

We expect a near-term headwind for Lupin and therefore recommend a HOLD rating with a target price of Rs 950.

Q3 revenue growth modest at 4% YoY (+2% QoQ) despite strong US and India formulation business, as API revenue declined 25%

3QFY22 miss led by business mix and lower operating leverage LPC delivered a lower than expected 3QFY22 financial performance, led by moderate growth in the US and India and higher price erosion and raw material cost. While the management continues its efforts towards building a complex pipeline and working on cost optimization measures, a meaningful benefit is expected from 2HFY23 onwards. We have cut our FY22E/FY23E/FY24E EPS estimate by 12%/26%/23% to reflect: a) lower offtake of seasonal products in the US, b) reduced demand...

Learnings at Goa to enhance remediation measures at other sites as well After almost 4.5 years of regulatory hurdles, LPC received a favorable classification (Voluntary Action Indicated or VAI) for its Goa facility from the USFDA. This is a big relief from a compliance standpoint, given the reasonable contribution in the base business as well as double digit ANDAs pending approval from the Goa site. We expect 21% earnings CAGR over FY21-23E and raise our 12-month forward P/E to 25x (to factor Goa compliance) from 24x earlier and arrive at our TP to INR990/share. While the regulatory clearance removes a key overhang on the Goa...

About the stock: Lupin is a multinational pharma company engaged in manufacturing & marketing branded & generic formulations, APIs, biotech products as well as OTC medicines across multiple dosage forms & therapeutic categories....

Lupin Limited is a multi-national pharmaceutical company based in Mumbai. The company specializes in branded and generic formulations, API's and advanced drug delivery systems in the area of biotechnology. The...