Lupin Ltd. Margins under pressure - Maintain Accumulate ::Emkay

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Lupin Ltd.

Margins under pressure - Maintain Accumulate

ACCUMULATE

CMP: Rs475                                        Target Price: Rs501

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n     Lupin’s Q2FY12 results were below expectations. Revenues at Rs17.7bn (up 23.6%YoY), b) EBITDA at Rs3.0bn (up 2.5% YoY), and c) APAT at Rs2.1bn (down 3.1% YoY)

n     Revenues were largely driven by growth in India, and Export Formulations

n     Going forward, margins will remain stressed due to adverse rupee movement as company has hedged $200mn of exports at ~Rs 46 and losses are parked in balance sheet

n     Maintain Accumulate with a target price of Rs501