Buy Lupin; target of Rs 593: Angel Broking

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Buy Lupin; target of Rs 593: Angel Broking

Angel Broking is bullish on Lupin and has recommended buy rating on the stock with a target of Rs 593 in its January 31, 2012 research report.

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Angel Broking is bullish on Lupin and has recommended buy rating on the stock with a target of Rs 593 in its January 31, 2012 research report.

"For 3QFY2012, Lupin net sales grew by 21.9% yoy to Rs1,792cr, just in-line with our expectation of Rs1,745cr. However, OPM for the quarter stood at 19.3%, lower than our estimate 19.7%. Net profit came in at Rs235.5cr, lower than our expectation of Rs261.5cr. We continue to maintain our Buy view on the stock."

"Lupin reported net sales of Rs1,792cr, up 21.9% yoy, in-line with our estimate. The company's gross margin expanded to 65.1%, above our expectation of 62.5%, because of better product mix. This led to OPM expanding to 19.3%. However, Lupin reported a low digit growth of 5.0% yoy in its bottom line to Rs235cr, which also came in below our estimate of Rs261cr. This was mainly on account of higher tax-outgo during the quarter than expected by us."

"We expect Lupin's net sales to post a 20.4% CAGR to Rs8,426cr and earnings to report a 24.0% CAGR to Rs29.7/share over FY2011-13E. Currently, the stock is trading at 21.2x and 16.0x FY2012E and FY2013E earnings, respectively. We maintain our Buy recommendation on the stock with a target price of Rs593," says Angel Broking research report.  

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To read the full report click on the attachment