Moneycontrol
Feb 13, 2017 05:23 PM IST | Source: Moneycontrol.com

Buy Lupin; target of Rs 1771: Khambatta Securities

Khambatta Securities is bullish on Lupin has recommended buy rating on the stock with a target price of Rs 1771 in its research report dated February 13, 2017.

Buy Lupin; target of Rs 1771: Khambatta Securities


Khambatta Securities's research report on Lupin


Lupin’s total income increased 4.5% q-o-q but increased 26.1% y-o-y to Rs 44,829 mn in 3Q FY17 in-line with our expectation for the quarter. EBITDA increased 18.3% q-o-q and 38.6% y-o-y to Rs 12,158 mn in 3Q FY17. EBITDA margin increased 316 bps q-o-q and 245 bps y-o-y to 27.1% in-line with our expectation for the quarter.


Outlook


We value the business at 22.0x FY 2018E EPS of Rs 80.8 i.e Rs 1,778 per share. Lupin valuation through DCF is Rs 1,763 per share. Consequently, using a weighted average methodology we arrive at a share price of Rs 1,771, generating a 20.7% potential upside from current levels. Hence we reiterate our ‘Strong Buy’ rating for Lupin common stock.

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