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UBS Investment Research
Lupin Limited
Q 4 FY11: In line, focus on rapid growth
Sales Rs15.1bn (+18% YoY, +3% QoQ)
Q4 FY11 revenues were above UBS-e of Rs14.5bn driven by strong growth in API,
Japan and ROW markets. Japan revenues grew 28% YoY to Rs1.6bn. Formulation
sales for the US and EU markets were Rs6.2bn (+6% YoY). India formulations grew
only 3% YoY to Rs3bn and 15% YoY for FY11.
EBITDA Rs2.7bn (+8% YoY), PAT Rs2.2bn (+3% YoY)
EBITDA grew 8% YoY to Rs2.7bn. The core EBITDA margin came in at 17.8%,
below UBS-e of 19.4% on higher raw material (RM) cost and higher R&D expenses.
RM cost increased 269bps YoY to 40.7% of sales. R&D expense increased 30% YoY
to 9.7% of sales due to bunching up of Abbreviated New Drug Application (ANDA)
filings. The company filed 21 ANDAs in FY11 (11 in Q4 FY11) and received
approvals for eight.
Targeting US$3bn of revenues by FY14, larger acquisitions
Management at the investor meet stated its broad target to reach ~US$3bn of revenues
by FY14. The company intends to look at larger, more meaningful acquisitions in
future given its increasing scale. Near term, it reiterated plans to launch more than 10
products in the US in FY12 including Geodon. The company plans to launch seven
products in Japan and expects India growth to remain close to 20% YoY. However,
management stated there is no timeline for the Allernaze launch as yet. The
Prescription Drug User Fee Act (PDUFA) date for Suprax drops is September 2011.
The company is focusing on dermatology, biosimilars and asthma as areas of future
growth.
Valuation: maintain Buy, price target of Rs525
We derive our price target from a DCF-based methodology and explicitly forecast longterm
valuation drivers using UBS’s VCAM tool. We assume a WACC of 11%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Lupin Limited
Q 4 FY11: In line, focus on rapid growth
Sales Rs15.1bn (+18% YoY, +3% QoQ)
Q4 FY11 revenues were above UBS-e of Rs14.5bn driven by strong growth in API,
Japan and ROW markets. Japan revenues grew 28% YoY to Rs1.6bn. Formulation
sales for the US and EU markets were Rs6.2bn (+6% YoY). India formulations grew
only 3% YoY to Rs3bn and 15% YoY for FY11.
EBITDA Rs2.7bn (+8% YoY), PAT Rs2.2bn (+3% YoY)
EBITDA grew 8% YoY to Rs2.7bn. The core EBITDA margin came in at 17.8%,
below UBS-e of 19.4% on higher raw material (RM) cost and higher R&D expenses.
RM cost increased 269bps YoY to 40.7% of sales. R&D expense increased 30% YoY
to 9.7% of sales due to bunching up of Abbreviated New Drug Application (ANDA)
filings. The company filed 21 ANDAs in FY11 (11 in Q4 FY11) and received
approvals for eight.
Targeting US$3bn of revenues by FY14, larger acquisitions
Management at the investor meet stated its broad target to reach ~US$3bn of revenues
by FY14. The company intends to look at larger, more meaningful acquisitions in
future given its increasing scale. Near term, it reiterated plans to launch more than 10
products in the US in FY12 including Geodon. The company plans to launch seven
products in Japan and expects India growth to remain close to 20% YoY. However,
management stated there is no timeline for the Allernaze launch as yet. The
Prescription Drug User Fee Act (PDUFA) date for Suprax drops is September 2011.
The company is focusing on dermatology, biosimilars and asthma as areas of future
growth.
Valuation: maintain Buy, price target of Rs525
We derive our price target from a DCF-based methodology and explicitly forecast longterm
valuation drivers using UBS’s VCAM tool. We assume a WACC of 11%.
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