Buy Lupin: Edelweiss Research

Edelweiss Research report on Lupin:

"We met the management of Lupin and were more than convinced that the company is on a high growth trajectory and could very well surpass our estimates for FY08."

"Based on our discussions, we believe that the US generics business is likely to grow at a higher rate than our earlier estimate of 73% in FY08E. This is owing to the launch of major generic products—Statins, Cefdinir, and Quinapril. The other businesses consisting of API, developing market formulations and domestic formulations will continue to show good growth."

"We have, therefore, revised our FY08 revenue estimate upwards by 2% and EPS estimate upwards by 7%. Our FY07 earnings estimate remains unchanged. At CMP of INR 502, the stock trades at a P/E of 16.7x and 13.1x on our FY07E and FY08E, respectively. We reiterate our ‘Buy’ recommendation."