Buy Lupin; target Rs 647: Angel Broking

"Lupin net sales grew by 43.8% yoy to Rs 2,219cr (For 1QFY2013), above expectation of Rs 1,843cr. However, OPM for the quarter stood at 19.1%, lower than our estimate 19.7%. Net profit came in at Rs 280cr, slightly higher than our expectation of Rs 257cr. We continue to maintain our Buy view on the stock. Lupin reported net sales of Rs 2,219cr, up 43.8% yoy, higher than our estimate. The company’s gross margin came in higher at 63.1%, higher than last corresponding period (60.0%). This resulted in the OPM’s coming in at 19.1%. However, inspite of the robust sales growth the net profit grew only by 33.5%yoy on account of higher taxation and interest expenditure to end the period at Rs 280cr."

"We expect Lupin’s net sales to post a 19.3% CAGR to Rs 10,082cr and earnings to report a 19.3% CAGR to Rs 32.4/share over FY201214E. Currently, the stock is trading at 22.2x and 18.7x FY2013E and FY2014E earnings, respectively. We maintain our Buy recommendation on the stock with a target price of Rs 647," says Angel Broking research report.

Quarterly Shifts by Public Shareholders holding more than 1%

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.