Lupin Pharmaceuticals
(LPC IN, Rs397, Not rated)
Key takeaways
Management believes that one of the key differentiators for Lupin amongst the Indian pharma
players is the high-margin branded generic business. The various acquisitions done in the past
have been well integrated with the company. The company expects Lupin’s brands Suprax,
Allernaze and Antara will be the future growth drivers. Lupin has a field force of 175 people in US.
Lupin is 8th largest in terms of prescriptions and the fastest growing among the top 10 generic
companies in the US (in FY10 US business grew ~37%YoY). Lupin currently markets 26 products
in the US market, of which 13 products are ranked 1 and hold top 3 positions in 25 of 26 products.
Lupin cumulative filings stand at 127, of which 40 products have been approved.
With Kyowa acquisition Lupin figures among the few Indian companies with a significant presence
in the world’s second largest pharma market. In its healthcare policy, the Japanese government
introduced a new policy and regulatory reforms to increase the generic drugs’ contribution from a
relatively low 17% in CY2007 to 30% of prescriptions by CY2012. Management believes this
would open up a significant opportunity for the global generic players.
Lupin ranks No.5 in the Indian domestic formulation market with a market share of 2.75% (Org
IMS data). Lupin is the fastest growing company among the top-5 companies in the domestic
formulation space with a CAGR growth of 20.0% between FY08A-10A.
Valuation
Currently Lupin is trading at Bloomberg consensus PER of 18x FY12 earnings and ~13 x FY12
EV/EBITDTA.
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