Rally in Lupin's stock a precursor to its March quarter results

If the recent run up of its stock vaulting to a record high is any indication, drug major Lupin is likely to report strong set of numbers tomorrow for the quarter ended March 2014. Driven by strong performance in the export markets, the Mumbai-based pharma company is expected to post 25% increase in revenues with operating margins being maintained at 26%.

Thanks to launch of limited competition products in the US, Lupin is going to be an industry out performer for the March quarter. In the domestic market also, the company is expected to post above-industry growth rate. Lupin’s stock has already appreciated 40% in the last one year – gaining 10% alone in the last three months. While most of the positives have been factored into the stock at the current valuations, the stock is likely to react positively in case of company beating the street expectations.

After Sun Pharma, Lupin with its strong performance across all its key markets of the US, India and Japan has become an analysts’ favourite. Its limited competition product pipeline in the US, recent acquisition of a Mexican company to tap the Latin American market and its latest joint venture with a Japanese company to develop biosimilars hint at a strong growth trajectory.