Reduce Lupin; target of Rs 1615: ICICI Securities

ICICI Securities recommended reduce rating on Lupin with a target price of Rs 1615 in its research report dated July 10, 2024.

Broker Research

July 11, 2024 / 11:55 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Securities research report on Lupin

Lupin’s recent success in US (sales grew ~34% YoY in FY24) is driven by its better regulatory track record and traction in inhalation portfolio. Share of inhalation products has risen from 25% of US sales in FY22 (USD 185mn) to 40% in FY24 (USD 326mn) post the launch of gSpiriva. In India, growth had been subdued due to the discontinuation of in-licensed brands (contribution down from 15% in FY23 to 11% in Q4FY24). Going ahead, management is targeting 10% YoY growth in India in FY25. Launch of gSprivia in US, softer RM and export incentives (up 111% YoY to ~INR 3bn or 1.5% of sales) have helped Lupin improve margins by robust 870bps YoY to 19% in FY24. Launches and cost curtailments may aid a further expansion in margins in the near term. We raise EPS estimates by 5-12% for FY25-26E, factoring in better sales from potential launches.

Outlook

Maintain REDUCE on pricey valuation, but raise target price to INR 1,615 on 24x FY26E earnings.

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