Buy Lupin; target of Rs 2420: Prabhudas Lilladher

Buy

Prabhudas Lilladher's research report on Lupin

Lupin’s (LPC) Q3FY25 EBITDA adjusted for one time provision stood at Rs14.5bn (up 42% YoY) ~9% beat to our estimates on the back of higher US sales and other operating income. OPM rose to 25.2% (up 100bps QoQ) driven by niche launches (gMyrbetriq 50mg). LPC saw remarkable turnaround in profitability with ~2x jump in EBITDA over FY23-24 aided by better product mix, continued niche launches in the US, clearance from USFDA for facilities, domestic formulations regaining momentum and cost optimization measures. We expect margins to sustain given a strong pipeline in the US. Our FY26/27E EPS estimates broadly remain unchanged.

Outlook

We maintain BUY rating with TP of Rs2,420 (25x FY27E EPS. Any competition in gSpiriva and delay in new launches in the US will be key risks to our estimates.

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Lupin - 13022025 - prabhu