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M a r g i n s p r e s s u r e ; p r o d u c t l a u n c h e s h o l d k e y …
Lupin’s Q1FY12 results were a mixed bag. Total revenues increased
17.5% YoY to | 1567.8 crore in line with our expectation of | 1575 crore,
driven by healthy growth in emerging markets including India and
Japanese market. EBITDA margins declined 250 bps to 18.8% on the back
of price erosion in Lotrel (US market), shift of production from Goa to
Indore and increase in employee expenses due to additions at Indore SEZ
and at R&D centre. The company has started transferring products from
the to Indore facility for tax benefits. The net profit increased 7% to | 210
crore, which was below our expectation of | 236 crore.
Medicis Pharma to use Lupin R&D platform
Lupin signed an R&D agreement with US based Medicis Pharma
under which Medicis will use the R&D platform of Lupin for their
product pipeline. Lupin will get US$20 million as upfront payment
from Medicis for formulating certain therapeutic products for
Medicis using Lupin’s formulation technologies.
Lupin to market Eli Lilly’s Huminsulin products in domestic market
Lupin and Eli Lilly have signed an agreement under which Lupin will
distribute Eli Lilly’s Huminsulin range of products in the domestic
market. Total sales of the brand are around | 125 crore. Total Indian
insulin market in India is estimated to be around | 975 crore.
V a l u a t i o n
We are maintaining higher multiple mainly on account of geographical
spread, clean balance sheet, management pedigree and consistent track
record. Lupin is currently trading at ~20x FY12E EPS of | 23.6 and ~17x
FY13E EPS of | 27.9. We expect sales, EBITDA and profits to grow at a
CAGR of 19%, 22% and 20% between FY11 and FY13E, respectively. We
are maintaining our target price of | 530, i.e. 19x FY13E EPS of | 27.9. We
also recommend that existing shareholders who bought the stock at our
earlier recommendation hold the same and average at lows.
Visit http://indiaer.blogspot.com/ for complete details �� ��
M a r g i n s p r e s s u r e ; p r o d u c t l a u n c h e s h o l d k e y …
Lupin’s Q1FY12 results were a mixed bag. Total revenues increased
17.5% YoY to | 1567.8 crore in line with our expectation of | 1575 crore,
driven by healthy growth in emerging markets including India and
Japanese market. EBITDA margins declined 250 bps to 18.8% on the back
of price erosion in Lotrel (US market), shift of production from Goa to
Indore and increase in employee expenses due to additions at Indore SEZ
and at R&D centre. The company has started transferring products from
the to Indore facility for tax benefits. The net profit increased 7% to | 210
crore, which was below our expectation of | 236 crore.
Medicis Pharma to use Lupin R&D platform
Lupin signed an R&D agreement with US based Medicis Pharma
under which Medicis will use the R&D platform of Lupin for their
product pipeline. Lupin will get US$20 million as upfront payment
from Medicis for formulating certain therapeutic products for
Medicis using Lupin’s formulation technologies.
Lupin to market Eli Lilly’s Huminsulin products in domestic market
Lupin and Eli Lilly have signed an agreement under which Lupin will
distribute Eli Lilly’s Huminsulin range of products in the domestic
market. Total sales of the brand are around | 125 crore. Total Indian
insulin market in India is estimated to be around | 975 crore.
V a l u a t i o n
We are maintaining higher multiple mainly on account of geographical
spread, clean balance sheet, management pedigree and consistent track
record. Lupin is currently trading at ~20x FY12E EPS of | 23.6 and ~17x
FY13E EPS of | 27.9. We expect sales, EBITDA and profits to grow at a
CAGR of 19%, 22% and 20% between FY11 and FY13E, respectively. We
are maintaining our target price of | 530, i.e. 19x FY13E EPS of | 27.9. We
also recommend that existing shareholders who bought the stock at our
earlier recommendation hold the same and average at lows.
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