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Lupin share falls 3% post Q4 earnings, here's what brokerages say

Share of Lupin fell up to 3.7% to Rs 1165.95 against previous close of Rs 1,210 on BSE

twitter-logoBusinessToday.In | May 14, 2021 | Updated 12:33 IST
Lupin share falls 3% post Q4 earnings, here's what brokerages say
Lupin share trades higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.

Lupin share lost over 3% today after the firm reported a 18.15% rise in Q4 net profit. Share of Lupin fell up to 3.7% to Rs 1165.95 against previous close of Rs 1,210 on BSE.

The share trades higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages. The share has gained 36.25% in one year and risen 20.37% since the beginning of this year.

Market cap of the firm fell to Rs 53,059 crore on BSE. Total 1.95 lakh shares changed hands amounting to turnover of Rs 23.30 crore. The pharma share hit 52-week high of Rs 1,246 on May 11, 2021  and fell to 52 week low of Rs 828.65 on July 27, 2020. Net profit in Q4 rose to Rs 460 crore against Rs 389 crore in the corresponding period of previous fiscal. Total income in Q4 slipped 5.25% to Rs 3,841 crore against Rs 4,054 crore income in corresponding quarter of last year.

The pharma firm turned profitable with a profit of Rs 1,216 crore for the fiscal ended March 2021 against a loss of Rs 269 crore in the previous fiscal. However, total income fell 3.53% to Rs 15,299 crore in FY20-21 against Rs 15,858 crore in FY19-20.

Earnings per share in the last fiscal rose to Rs 26.72 against a negative Rs 5.95 in FY 19-20.

Lupin back in the black in FY20, reports Rs 1,216-crore profit

The board recommended a dividend of 325% to the face value of share.

Motilal Oswal downgraded its stance to neutral for the stock after  Q4 earnings.

"We have raised our FY22E/FY23E EPS by 2%/9% to factor in: a) outperformance in the domestic formulation (DF)segment, b) niche launches in the US and Europeanmarket, c) extended benefit of cost savings in DF, and d) lower effective tax rate. We value LPC at 25x 12-month forward earnings to arrive at our target priceof Rs 1,320/share. We believe that current valuation factors the potential upside from niche launches. We downgrade to Neutral on limited upside from current levels," the brokerage said.

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Bansi Desai, CFA, HDFC Securities and Karan Vora, Institutional Research Analyst, HDFC Securities said, "Management guided for a double-digit growth in key markets (India and US) in FY22 and EBITDA margin improvement to 21-22% by FY23 (vs. 17.2% in FY21). We continue to remain positive on Lupin's ability to execute and monetise its complex pipeline in the US (inhalers and complex injectables).

We factor in 460bps margin improvement (to 21.8%) and 40% earnings CAGR over FY21-23e, driven by operating leverage. However, at 31x/23x FY22/23 EPS, the positives appear priced in. We tweak our estimates by minus 3%/plus 4% for FY22/23e and revise the target price to Rs 1,220. Downgrade to ADD."

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