Neutral Lupin; target of Rs 2,200: Motilal Oswal

Motilal Oswal research report on Lupin

Lupin (LPC) delivered slightly better-than-expected revenue, EBITDA, and PAT for the quarter (4% beat). LPC continues to track well in the US generics segment (40% of 4Q sales), clocking the highest quarterly run-rate of USD245m over the past 24 quarters. The strong 47% YoY earnings growth for 4QFY25 was supported by healthy growth in key geographies, a higher share of limited competition products, PLI income, and a lower tax rate. The superior product mix has led LPC to achieve a peak gross margin of 70% in 36 quarters.

Outlook

While LPC has delivered phenomenal financial performance over the past three years (adj. PAT surged from a low of INR 4b in FY23 to INR 33b in FY25), we expect 12% earnings CAGR over FY25-27, as new launch benefits would be offset to some extent by higher competition in the base business. We reiterate our Neutral rating.