Lupin Q2 Results An 'All-Around Beat', Says Macquarie, Brokerages Positive
Macquarie and Nomura remain positive on Lupin, as the company's Q2 profit and sales surpassed estimates.
Lupin's second quarter earnings have analysts buzzing, with brokerages highlighting the pharmaceutical giant's standout financials despite market challenges.
Macquarie analysts described the results as an "all-round beat". Although revenue aligned closely with their forecast, Ebitda and profit after tax exceeded expectations by 3% and 10%, respectively, compared to Bloomberg's estimates. This strong performance was driven by a solid 23% Ebitda margin, outperforming consensus estimates.
Hence, Macquarie maintained an 'outperform' rating on Lupin, optimistic about the company's steady growth across regions. They set a target price of Rs 2,515 per share.
Nomura had a similar bullish sentiment, noting Lupin's sales, Ebitda, and profit after tax all surpassed its expectations by 3.2%, 8.3%, and 11.5%, respectively. Strong growth in India and steady US sales kept the company on track. Lupin's margin rose by 373 basis points year-on-year, benefiting from a favourable product mix and easing raw material costs.
Nomura remains optimistic with a 'buy' rating and a target price of Rs 2,427 per share.
Investec's view is more tempered, maintaining a 'hold' rating with a target price of Rs 2,100 apiece. While they acknowledged Lupin's strong India sales, which were up 19% year-on-year, they pointed to a dip in US sales due to heightened competition in generics and inventory issues.
Investec is cautious about Lupin's near-term growth potential, especially with ongoing competition in the US market.
Shares of Lupin rose as much as 2.14% before paring gains to trade 0.36% higher at Rs 2,119 apiece at 11:37 a.m., compared to a 0.22% advance in the NSE Nifty 50.
The stock has risen 51.81% on a year-to-date basis, and has advanced 74.96% in the last 12 months. Total traded volume so far in the day stood at 5.9 times its 30-day average. The relative strength index was at 42.51.
Out of 26 analysts tracking the company, 17 maintain a 'buy' rating, 10 recommend a 'hold' and nine suggest 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies a downside of 3.1%.
