Sharekhan's research report on Lupin
Q4FY2023 financial performance strongly beat expectations, largely driven by more-thananticipated improvements in the costs. Yet, while competitive pressures have led to restructuring of its US business, India business’ revenue growth has been hit by loss of Cidmus brand and stiff competition in diabetes segment on entry of generic players. Company is also grappling with USFDA compliance issues in many key facilities including Mandideep and Pithampur.
Outlook
Stock still trades at a higher valuation of ~ 33.5x/21.3x its FY2024E/FY2025E earnings as compared to peers trading at ~ 18.5x/15.8x their FY2024E/FY2025E estimates. Hence, we maintain a Reduce on Lupin Ltd. with a revised PT of Rs. 700 (vs. Rs. 660 earlier).
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