Accumulate Lupin; target of Rs 816: KR Choksey

KR Choksey recommended accumulate rating on Lupin with a target price of Rs 816 in its research report dated May 12, 2023.

Broker Research

May 13, 2023 / 22:37 IST

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KR Choksey's research report on Lupin

Lupin reported a revenue of INR 43303 Mn in Q4FY23, the revenue grew by 14.1% YoY and 2.5% QoQ. Growth is attributable to increase in YoY revenue across the region. Except India, all the geographies reported QoQ growth. EBITDA margins expanded by 721 bps YoY and 72bps QoQ to 13%. EBITDA for the quarter grew by 155.1% YoY and 8.5% QoQ to INR 5778 Mn. For FY23, EBITDA margins stood at 10.8% The margins have improved on annual basis as a result of better growth in India, improvement of margins in the US as well as growth in other areas like API business, EMEA and APAC region. The company reported a Net Profit of INR 2423 Mn in Q4FY23 as against net loss of INR 5179 Mn in Q4FY22 and net profits of INR 1577 Mn in Q3FY23. The PAT margins rose to 5.5%( +1881bps YoY , +182bps QoQ).

Outlook

Considering the better performance in Q4FY23, we revised our target price (TP) upward to INR 816/share (earlier 755), indicating a 6.7% upside over the CMP. Lupin is currently trading at a PE multiples of 25.8x/18.9x based on our FY24E/FY25E EPS respectively. Accordingly, we revise our rating to ‘ACCUMULATE’ (Previously HOLD) on the shares of Lupin Ltd.

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