Citi maintains 'buy' on Lupin
Citi has maintained its 'buy' rating on mid-sized Indian pharma firm Lupin, and raised its target price to Rs 1,415, following the acquisition of Antara.
By ET Bureau |
Lupin
CMP: Rs 1,137
Target price: Rs 1,415
Citi has maintained its 'buy' rating on mid-sized Indian pharma firm Lupin, and raised its target price to Rs 1,415, following the acquisition of Antara. "The acquisition is not only accretive, but also improves the quality of the business in the US. Antara strengthens Lupin's US branded franchise and acts as a growth and margin driver ahead of the oral contraceptives launches in the US," said the Citi note to clients.
Lupin acquired the rights for Antara (fenofibrate 130 mg & 43 mg capsules) from Oscient (bankruptcy proceedings) for $38.6 million.
"This deal also lowers the potential impact of two key-risk factors such as imminent generic competition in Suprax and potential escalation of FDA issues at Mandideep. This leads us to use a slightly higher multiple now ��� albeit still at a discount to other comparable companies in this space. While we believe that Lupin is one of the more likely candidates among second-line Indian pharma stocks to be re-rated in line with the sector, the warning letter to its Mandideep facility could act as an overhang on valuations," adds the brokerage house.
CMP: Rs 1,137
Target price: Rs 1,415
Citi has maintained its 'buy' rating on mid-sized Indian pharma firm Lupin, and raised its target price to Rs 1,415, following the acquisition of Antara. "The acquisition is not only accretive, but also improves the quality of the business in the US. Antara strengthens Lupin's US branded franchise and acts as a growth and margin driver ahead of the oral contraceptives launches in the US," said the Citi note to clients.
Lupin acquired the rights for Antara (fenofibrate 130 mg & 43 mg capsules) from Oscient (bankruptcy proceedings) for $38.6 million.
"This deal also lowers the potential impact of two key-risk factors such as imminent generic competition in Suprax and potential escalation of FDA issues at Mandideep. This leads us to use a slightly higher multiple now ��� albeit still at a discount to other comparable companies in this space. While we believe that Lupin is one of the more likely candidates among second-line Indian pharma stocks to be re-rated in line with the sector, the warning letter to its Mandideep facility could act as an overhang on valuations," adds the brokerage house.
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