Motilal Oswal's research report on Lupin
Lupin (LPC) delivered lower-than-expected 1QFY23 performance, led by a decline in the US sales and reduced operating leverage. EBITDA margin was below its previous lows and stood at 4.4%. We cut our EPS by 35%/3% for FY23E/FY24E factoring in: a) inventory writedown and shelf stock adjustment in the US generics, b) ongoing price erosion in the US base business and c) gradual reduction in operational cost.
Outlook
We value LPC at 22x 12M forward earnings to arrive at our TP of INR610. We are yet to see signs of revival in the business in its key markets and hence maintain our Neutral rating on the stock.
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