ICICI Direct's research report on Lupin
Q3 revenues grew 6.6% YoY to Rs 4017 crore (I-direct estimate: Rs 3961 crore). US revenues grew 4.8% YoY to Rs 1442 crore whereas domestic formulations grew 5.4% YoY to Rs 1367 crore. ROW markets remained flattish at Rs 437 crore. API segment grew 8.4% YoY to Rs 344 crore. EBITDA margins improved 797 bps YoY to 19.4% (I-direct estimate: 16.5%) due to better gross margins amid ramp-up of complex generics segment and better operating leverage owing to cost control measures. EBITDA grew 81.0% YoY to Rs 779 crore (I-direct estimate: Rs 654 crore). Adjusted PAT was at Rs 438 crore, up 258% YoY. Delta vis-a-vis EBITDA was due to lower interest cost and tax rate.
Outlook
We upgrade from HOLD to BUY and arrive at our target price of Rs 1165 (vs. Rs 985 earlier) based on 25x FY23E EPS of Rs 46.6.
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