Hold Lupin: target of Rs 1950: ICICI Securities

ICICI Securities's research report on Lupin

Lupin’s Q1FY26 result was largely in-line with our estimates. Launch of Tolvaptan in US (180 days exclusivity) helped Lupin offset the impact of price erosion in its US portfolio and a muted performance in India. While the exclusivity in Tolvaptan may last for another quarter, other launches lined up in the near term may not help Lupin sustain its current leg of momentum in US. Management guides for double-digit growth in US and overall business in FY26 with EBITDA margin between 24–25% while, in FY27, it may achieve single-digit revenue growth as margins expand further. We cut our FY27E EPS a tad, by ~1%, to factor in muted performance in India. Retain HOLD; TP revised to INR 1,950 (vs. INR 2,110), based on 20x FY27E EPS.

Outlook

We expect margin to be at ~23% in FY27E, as loss of exclusive products in US may weigh it down. The stock trades at attractive valuation of 21.2x FY26E and 19.4x FY27E earnings. Maintain HOLD with a lower TP of INR 1,950 based on 20x FY27E EPS (22x FY27E EPS earlier).