Sell Lupin; target of Rs 740: ICICI Securities

sell

ICICI Securities research report on Lupin

Lupin is the first company globally to receive the final approval of the USFDA for US$1.264bn inhalation drug gSpiriva (Tiotropium Bromide). We factor in US$100mn revenue from this drug in FY24E. Besides, Darunavir (approved in Jun’23), gNascobal and Diazepam gel (TAD in Jul’23) are the launches lined up in FY24. These launches could potentially drive 21.7% growth in Lupin’s US revenue to US$769mn in FY24E. The management has previously guided for over 500bps expansion in EBITDA margin to 15-16% for FY24E with exit margin to be higher at 18%. We raise our revenue/EBITDA/PAT estimate by 2%/13%/20%, respectively, for FY25E.

Outlook

The stock continues to trade a pricey 33x/28x FY24/25E earnings of Rs26.3/31.4, respectively. Maintain SELL with a revised TP of Rs740/share (earlier: Rs630/share).

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Lupin - 22 -06 - 2023 - ics