Reduce Lupin; target of Rs 680: ICICI Direct

ICICI Direct's research report on Lupin

Lupin is a multinational pharma company engaged in manufacturing & marketing branded & generic formulations, APIs, biotech products as well as OTC medicines across multiple dosage forms & therapeutic categories. It is the third largest generic player (by prescriptions) in the US (market leader: 44 products; Top three: 113 products) along with being sixth largest company in the Indian pharmaceutical market • The company continues to face headwinds especially on the US generics front due to plant compliance issues besides persistent price erosion in OSD.

Outlook

We maintain REDUCE rating due to 1) Sensitivity of margins recovery on few US launches, 2) Ongoing cost rationalisation, which is yet to bring sustainable cost reduction, 3) weak return ratios. Valued Lupin at Rs 680 i.e. 26x FY24E EPS of Rs 26.2.

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Lupin - 14 -11-2022 - icici