Buy Lupin; target of Rs 1120: HDFC Securities

HDFC Securities' research report on Lupin

Lupin’s 2Q results were operationally in line as good traction in revenues (+9% QoQ), savings in staff cost led to EBITDA margin improvement of ~300bps QoQ to 16.8% (adjusting for forex loss and one off costs). Management commented on continued focus on cost control and operating leverage benefits to kick in from Q4 onwards. US generics business is expected to see increased momentum in 2H with higher contribution of gAlbuterol, gGlumetza (re-launched) and flu drugs. We remain positive on Lupin’s ability to execute in the US (market share gains in key launches) which will be key to drive margin expansion of ~450bps over FY21-23e.

Outlook

We trim our estimatesforFY21/22/23 by 6%/6%/5%to factor slightly higher other expenses and lower other income. Revised TP Rs1120/sh.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More