Feb 14, 2017 06:23 PM IST | Source:

Buy Lupin; target of Rs 1850: Motilal Oswal

Motilal Oswal is bullish on Lupin has recommended buy rating on the stock with a target price of Rs 1850 in its research report dated February 09, 2017.

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Todays L/H

Motilal Oswal's research report on Lupin

Revenue grew 26% YoY to INR 44.8b (6% above est.). Gross margin was stable QoQ at 71.0%. EBITDA rose 27% YoY to INR 12.2b (16% above est.), with margin of 27% above our estimate of 24.7%. EBITDA margin improvement was primarily driven by strong growth in US sales (+53% YoY, +8% QoQ; despite R&D as % of sales at 12.9%) and forex gain of INR 270m. PAT of INR 6.3b was impacted by 1% due to a high tax rate of 39%.


Glumetza/Fortamet continue to be the key contributors to profits. Glumetza may continue to see limited competition in near term. Along with this, strong launch pipeline and ramp-up of Methergen sales can help drive US business over near term. Maintain Buy with TP of INR 1,850 @ 22x 1HFY19E PER (v/s INR 1,825 @ 22x 1H FY19E PER). We raise FY17E/18E EPS by 2-3% as we build impact of limited competition in Glumetza.

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