Buy Lupin; target of Rs 2375: Choice Equity Broking

Choice Equity Broking's report on Lupin

We continue to believe LPC will sustain its strong growth trajectory, led by high-value launches in North America and India. The company has demonstrated strong execution in scaling up new products, such as Tolvaptan, Mirabegron, Albuterol and gSpiriva, reinforcing confidence in its differentiated pipeline. Management has revised EBITDA margin guidance upwards to 25–26% (from 24–25%) for FY26E, supported by a lower mix of in-licensed products in India. While margin may contract ~100bps in FY27E due to planned higher R&D spend, we expect normalisation as newer complex launches ramp up.

Outlook

We forecast revenue/EBITDA/PAT to grow at a CAGR of 12%/15%/12% over FY25–28E and continue to value the stock at 25x the average of FY27–28E EPS, arriving at an unchanged TP of INR 2,375. We maintain our BUY rating.

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