Brokerages bullish on Lupin post Q2 results; raise target price
The company reported a 55 per cent jump in net profit at Rs 630 crore. It had reported a net profit of Rs 406 crore in the corresponding quarter.
By ET Online |
MUMBAI: Even as Lupin is witnessing selling pressure after reporting disappointing second quarter results, brokerages have increased their target price on the stock on expectations of strong outlook.
The company reported a 55 per cent jump in net profit at Rs 630 crore. It had reported a net profit of Rs 406 crore in the corresponding quarter last fiscal.
The company reported net sales of Rs 3,173.4 crore, up 20.6 per cent, against Rs 2,631 crore, Year-on-Year (YoY).
“Lupin’s 2QFY15 results were below our expectations, driven by a sharp US$56 million revenue decline in US generics on Cymbalta and Niaspan price erosion. Despite the decline in these high-margin opportunities, gross margins were steady and EBITDA margins (ex-forex loss) were in line,” said Kotak Institutional Equities report.
“We see the decline in US sales as a blip and expect continued momentum on the back of US launches over FY2016-17,” the report added.
The brokerage has maintained ‘Buy’ rating on the stock and increased its target price to Rs 1480 from Rs 1370 earlier.
Credit Suisse is of the view that while second quarter results were impacted by weak US sales, the product pipeline remains strong.
“Our estimates for FY15/16 increase by 12-16% as we build in a 40% beat in 2Q, and a higher margin trajectory which Lupin has achieved in the last three quarters. Lupin stays as one of our preferred picks in the sector due to its good product pipeline and strong execution track record,” the report said.
The brokerage has maintained ‘Outperform’ rating and increased its target price to Rs 1,560 as it rolled forward to 22x FY17E.
Analysts at Morgan Stanley expect steady growth momentum for Lupin, driven by 15-25 US launches p.a., recovery in domestic business, and mid-teens growth for RoW.
“Management maintained its previous target of achieving top-line growth to Rs 5 billion by F2018. Lupin has a very strong pipeline of new drugs. Management expects to license technology for new molecules in the next 12 months,” the report said.
The brokerage has increased its FY15 and FY16 EPS estimates by 10 per cent and 8 per cent. It has increased target price to Rs 1553 from Rs 1208 earlier.
At 01:00 p.m.; the stock was at Rs 1,357, down 0.05 per cent, on the BSE. It touched a high of Rs 1,376.45 and a low of Rs 1,347 intraday.
The company reported a 55 per cent jump in net profit at Rs 630 crore. It had reported a net profit of Rs 406 crore in the corresponding quarter last fiscal.
The company reported net sales of Rs 3,173.4 crore, up 20.6 per cent, against Rs 2,631 crore, Year-on-Year (YoY).
“Lupin’s 2QFY15 results were below our expectations, driven by a sharp US$56 million revenue decline in US generics on Cymbalta and Niaspan price erosion. Despite the decline in these high-margin opportunities, gross margins were steady and EBITDA margins (ex-forex loss) were in line,” said Kotak Institutional Equities report.
“We see the decline in US sales as a blip and expect continued momentum on the back of US launches over FY2016-17,” the report added.
The brokerage has maintained ‘Buy’ rating on the stock and increased its target price to Rs 1480 from Rs 1370 earlier.
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Credit Suisse is of the view that while second quarter results were impacted by weak US sales, the product pipeline remains strong.
“Our estimates for FY15/16 increase by 12-16% as we build in a 40% beat in 2Q, and a higher margin trajectory which Lupin has achieved in the last three quarters. Lupin stays as one of our preferred picks in the sector due to its good product pipeline and strong execution track record,” the report said.
The brokerage has maintained ‘Outperform’ rating and increased its target price to Rs 1,560 as it rolled forward to 22x FY17E.
Analysts at Morgan Stanley expect steady growth momentum for Lupin, driven by 15-25 US launches p.a., recovery in domestic business, and mid-teens growth for RoW.
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“Management maintained its previous target of achieving top-line growth to Rs 5 billion by F2018. Lupin has a very strong pipeline of new drugs. Management expects to license technology for new molecules in the next 12 months,” the report said.
The brokerage has increased its FY15 and FY16 EPS estimates by 10 per cent and 8 per cent. It has increased target price to Rs 1553 from Rs 1208 earlier.
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At 01:00 p.m.; the stock was at Rs 1,357, down 0.05 per cent, on the BSE. It touched a high of Rs 1,376.45 and a low of Rs 1,347 intraday.
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