Buy Lupin; target of Rs 855: Sharekhan

Sharekhan's research report on Lupin

Lupin’s Q2FY2023 performance was better than our as well as street expectations on account of strong sequential recovery in the US business while India business continued its growth momentum (on a like-to-like basis). Revenues stood flat at Rs. 4,145.5 crore (grew by ~11% q-o-q); EBITDA margin decreased by 285 bps y-o-y (improved by 472 bps q-o-q) to 10.9% and adjusted PAT stood at Rs. 134.5 crore. New product launches (including Suprep) will drive growth in Q3 and Q4. Management expects EBITDA margin to reach 16-18% by Q4FY2023 and better mix would help EBITDA margin to further improve to 20% by Q2FY2024.

Outlook

The stock is currently trading at 46x/31x its FY2023/24E earnings. In view of better outlook ahead in the key markets, we maintain our Buy on the stock with revised PT of Rs. 855.

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Lupin - 15 -11-2022 - khan