Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
What’s the theme?
Lupin is one of the best plays in the pharma space, given its strong execution capabilities, improving
financial performance and diversifying business model. The high-margin branded generic business has
been the key differentiator. Strong growth in the US (in branded generic and generic segments) and
improvement in operating margins would maintain the growth momentum.
What will move the stock?
1) Strong traction in the high-margin Suprax product (chewable tablets approved; double strength tablets
now enjoy more than 50% of total Suprax prescription share) and gradual pick-up in Antara prescription.
2) Approval of less competitive OC products (generic market size of >US$ 1bn) in 2HFY2012 and launch
of 10-12 generic products (other than OC) in the next 12 months. 3) Commencement of API supplies from
Goa facility to Kyowa a boost to margins. 4) Inorganic growth (Latam market, US branded generic the key
target segments), given a strong balance sheet.
Where are we stacked versus consensus?
Our FY12 estimates are higher than consensus. We expect net sales and earnings CAGR of 20.6% and
26.0% to Rs68,956mn and Rs24.3 respectively over FY10-12. We value the company at 22x (in line with
the big players in the sector) FY12E earnings, which yields a TP of Rs537.
What will challenge our target price?
1) Earlier-than-expected competition in Suprax. 2) Further delay in OC generic product approvals.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
What’s the theme?
Lupin is one of the best plays in the pharma space, given its strong execution capabilities, improving
financial performance and diversifying business model. The high-margin branded generic business has
been the key differentiator. Strong growth in the US (in branded generic and generic segments) and
improvement in operating margins would maintain the growth momentum.
What will move the stock?
1) Strong traction in the high-margin Suprax product (chewable tablets approved; double strength tablets
now enjoy more than 50% of total Suprax prescription share) and gradual pick-up in Antara prescription.
2) Approval of less competitive OC products (generic market size of >US$ 1bn) in 2HFY2012 and launch
of 10-12 generic products (other than OC) in the next 12 months. 3) Commencement of API supplies from
Goa facility to Kyowa a boost to margins. 4) Inorganic growth (Latam market, US branded generic the key
target segments), given a strong balance sheet.
Where are we stacked versus consensus?
Our FY12 estimates are higher than consensus. We expect net sales and earnings CAGR of 20.6% and
26.0% to Rs68,956mn and Rs24.3 respectively over FY10-12. We value the company at 22x (in line with
the big players in the sector) FY12E earnings, which yields a TP of Rs537.
What will challenge our target price?
1) Earlier-than-expected competition in Suprax. 2) Further delay in OC generic product approvals.
No comments:
Post a Comment