CLSA retains sell on Lupin, lowers target price to Rs 640

CLSA has retained sell rating on Lupin in the long term and lowered target price to Rs 640 from Rs 650. The stock ended up 0.8% at Rs 792.25 on Wednesday while the BSE Sensex closed 174.84 points up at 40,850.29.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 4296.90 crore, down -1.35 % from last quarter sales of Rs 4355.83 crore and up 10.43% from last year same quarter sales of Rs 3890.93 crore. The company has reported net profit after tax of Rs -124.40 crore in the latest quarter.


The company’s top management includes Dr.K U Mada, Dr.Kamal K Sharma, Mr.Dileep C Choksi, Mr.Jean-Luc Belingard, Mr.Nilesh Deshbandhu Gupta, Mr.R A Shah, Mr.Richard Zahn, Mrs.Manju D Gupta, Ms.Christine Mundkur, Ms.Vinita Gupta. Company has B S R & Co. LLP as its auditors. As on 30-06-2019, the company has a total of 452,590,752 shares outstanding.

Investment Rationale

The brokerage has cut earnings estimate on Lupin by 2-4%, factoring in lower US revenues due to slow ramp-up of Solosec and weak launch pipeline for generics. About 75-80% of incremental growth in the US is likely to come from three products, said CLSA. Product pipeline outside the three big ones is either addressing a small market or fairly competitive, and products coming from the sites impacted by warning letter will need US FDA clearance before launch, it said.