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Strong and distinct business model
Lupin is one of the leading Indian pharma companies actively
targeting the generics opportunity in regulated markets. Lupin has a
strong and distinct business model as Lupin is the only Indian
company having healthy performance in branded business in US. In
past 6 years, Lupin has moved up in the value chain (API to
formulation player) and expanded its reach to various geographies to
be more profitable.
US growth momentum to continue
Lupin is the fifth largest and amongst the top 5 fastest growing
companies in the US. Growth in the US market would continue led by
stabilized branded sales and growing generic portfolio with new niche
product launches. Company intends to manage 30:70 ratio between
branded franchise and generics to have a stable and profitable
revenue stream. Lupin has a cumulative filing of around 148 ANDAs
with approval for more than 90 ANDAs pending.
Japan, a huge generic opportunity to be grabbed
Japan, the second the largest pharma market, is witnessing a
prototype shift. The Japanese government is geared up to reduce
healthcare costs and after the current natural catastrophe we expect
government efforts to strengthen. Lupin is at advantageous position
owing to its acquisition of Kyowa, which is among the top 10 generic
companies in Japan (ranked 7th and growing at 23%).
Domestic business to augment growth
Lupin is fifth-largest pharmaceutical company in India with market
share of around 3.5%. Lupin recently partnered with Eli-Lilly to
promote Eli Lilly’s insulin products in Indian and Nepal. The move will
complete Lupin’s diabetes portfolio and would strengthen the growth
in India as the country has the largest diabetic pool.
Attractive valuation coupled with favorable risk-reward
Given its differentiated business & improving profitability, valuations
appear attractive even after accounting some weakness in the USbranded
business, Lupin currently trades at 20x/15x FY12E/FY13E
EPS of Rs23 and Rs31 respectively, at material discount to peers.
Lupin has a strong balance sheet with a superior earning profile and
hence, we expect valuation to catch up. Recommend Buy.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Strong and distinct business model
Lupin is one of the leading Indian pharma companies actively
targeting the generics opportunity in regulated markets. Lupin has a
strong and distinct business model as Lupin is the only Indian
company having healthy performance in branded business in US. In
past 6 years, Lupin has moved up in the value chain (API to
formulation player) and expanded its reach to various geographies to
be more profitable.
US growth momentum to continue
Lupin is the fifth largest and amongst the top 5 fastest growing
companies in the US. Growth in the US market would continue led by
stabilized branded sales and growing generic portfolio with new niche
product launches. Company intends to manage 30:70 ratio between
branded franchise and generics to have a stable and profitable
revenue stream. Lupin has a cumulative filing of around 148 ANDAs
with approval for more than 90 ANDAs pending.
Japan, a huge generic opportunity to be grabbed
Japan, the second the largest pharma market, is witnessing a
prototype shift. The Japanese government is geared up to reduce
healthcare costs and after the current natural catastrophe we expect
government efforts to strengthen. Lupin is at advantageous position
owing to its acquisition of Kyowa, which is among the top 10 generic
companies in Japan (ranked 7th and growing at 23%).
Domestic business to augment growth
Lupin is fifth-largest pharmaceutical company in India with market
share of around 3.5%. Lupin recently partnered with Eli-Lilly to
promote Eli Lilly’s insulin products in Indian and Nepal. The move will
complete Lupin’s diabetes portfolio and would strengthen the growth
in India as the country has the largest diabetic pool.
Attractive valuation coupled with favorable risk-reward
Given its differentiated business & improving profitability, valuations
appear attractive even after accounting some weakness in the USbranded
business, Lupin currently trades at 20x/15x FY12E/FY13E
EPS of Rs23 and Rs31 respectively, at material discount to peers.
Lupin has a strong balance sheet with a superior earning profile and
hence, we expect valuation to catch up. Recommend Buy.
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