Lupin - 4QFY2012 Result Update - Angel Broking

For 4QFY2012, Lupin's net sales grew by 24.6% yoy to Rs.1,883cr, just in-line with our expectation of Rs.1,853cr. However, OPM for the quarter stood at 17.6%, lower than our estimate 19.7%. Net profit came in at Rs.156cr, lower than our expectation of Rs.258cr. We continue to maintain our Buy view on the stock.

In-line numbers: Lupin reported net sales of Rs.1,883cr, up 24.6% yoy, in-line with our estimate. The company's gross margin came in stagnant at 59.5%, in-line with that in 4QFY2011 (59.3%). OPM was also flat at around 17.6%. However, despite robust sales growth, net profit dipped by 31.5% yoy on account of higher taxation and interest expenditure. During the quarter, the company booked tax on unrealized gains on inventory, which aided tax expenses during the quarter to be around Rs.135cr, up 92.2% yoy.

Outlook and valuation: We expect Lupin's net sales to post a 19.3% CAGR to Rs.10,082cr and earnings to report a 19.3% CAGR to Rs.32.4/share over FY2012–14E. Currently, the stock is trading at 18.8x and 16.0x FY2013E and FY2014E earnings, respectively. We maintain our Buy recommendation on the stock with a target price of Rs.647.

Source : Equity Bulls

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