Hold Lupin; target of Rs 905: Emkay Global Financial

Hold Lupin; target of Rs 905: Emkay Global Financial
June 02
21:24 2020

Emkay Global Financial recommended hold rating on Lupin with a target price of Rs 905 in its research report dated May 30, 2020.

Emkay Global Financial’s report on Lupin

Operating profits beat estimates but did not fully reflect the operating leverage from strong growth in the US/India. The beat was largely on account of lower R&D spends. US/India growth was partially aided by Covid-19-related pre-buying. Guidance for lower tax rate (35% vs. 40% earlier) and rationalization of Solosec-related spends by around 40% (US$ 55-60mn currently) were positive takeaways. Goa, Somerset, and Pithampur will be offered for re-inspection to USFDA in the next three months. Q1 should be weak across key markets like India and US (US Rx are down 20% vs. pre-Covid-19). US should improve subsequently from Levothyroxine ramp-up (~13% market share currently, can go to 20%+, per LPC) and gAlbuterol approval (before H2FY21).


We raise EPS by 8%/5% for FY21/22E, largely due to lower taxes. We retain Hold, with a revised TP of Rs905 (Rs670 earlier), valuing the stock at 25xJun’22 EPS in line with the long-term average (20x earlier) to account for improving visibility in the US. LPC is an OW in EAP.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Moneycontrol Ready Reckoner

Now that payment deadlines have been relaxed due to COVID-19, the Moneycontrol Ready Reckoner will help keep your date with insurance premiums, tax-saving investments and EMIs, among others.

Facebook-BCG report suggests these measures for businesses to unlock the changing consumer behaviour in the current pandemic. Read More!

First Published on Jun 2, 2020 11:43 am

Related Articles