Lupin shares fall over 4%. Should you buy, sell or hold? Here's what brokerages say

Shares of pharma major Lupin fell over 4% to Rs 838.1 in Thursday's intra-day trade on BSE after brokerages maintained reduce, and underperform rating on the stock.

Brokerage firms such as Jefferies maintained an 'Underperform' rating on Lupin, while Kotak maintained a 'Reduce' rating on the stock. Bernstein maintained a 'Marketperform' on Lupin.

At 11.18 am, the scrip was trading 3.5% lower at Rs 844.6 on BSE. However, the stock has surged 15% year-to-date, while it has rallied 38% in the last year.


Global brokerage firm Jefferies maintained an 'Underperform' rating on Lupin with a target price of Rs 660, indicating a downside of 22% from the current market prices.

Jefferies stated that gSpiriva approval was positive but was widely anticipated. gSpiriva approval does not resolve core business concerns, it said.
The global brokerage also said the stock trades at an expensive PE valuation.

Meanwhile, Kotak maintained a 'Reduce' rating on Lupin with a target of Rs 815, a downside of 4% from the current market prices. gSpiriva to contribute 17-21% to Lupin's EPS over FY2024-26.

Kotak believes the upside from gSpiriva is priced in. It stays cautious given Lupin's weak execution track record, slim medium-term US pipeline beyond gSpiriva, and subpar margin profile.

Brokerage firm Bernstein maintained a 'Marketperform' rating on Lupin with a target price of Rs 660, a downside of 22% from the current market prices.

Bernstein stated that Lupin is now trading higher than Sun Pharma and further valuation expansion seems difficult.

"Believe Spiriva is already in the numbers and don't expect meaningful earnings upgrades. Approval does improve confidence in their ability to improve margins," it said.

On June 21, Lupin said in an exchange filing that it had received approval from the USFDA for its abbreviated new drug application (ANDA) for Tiotropium Bromide Inhalation Powder, 18 mcg/capsule, a generic equivalent of Spiriva HandiHaler.

In Q4FY23, Lupin reported a consolidated net profit of Rs 246.7 crore, which fell by 25.3% against a net profit of Rs 330.43 in the December 2022 quarter.

The pharma player witnessed strong growth in EBITDA at Rs 615 crore, up by a whopping 117.8% YoY. Its revenue from operations stood at Rs 4,330.30 crore in Q4FY23, rising by 12% from Rs 3,864.50 crore in the same quarter a year ago.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)