Lupin - 1QFY2013 Result Update - Angel Broking

For 1QFY2013, Lupin net sales grew by 43.8% yoy to Rs.2,219cr, above expectation of Rs.1,843cr. However, OPM for the quarter stood at 19.1%, lower than our estimate 19.7%. Net profit came in at Rs.280cr, slightly higher than our expectation of Rs.257cr. We continue to maintain our Buy view on the stock.

Better than expected numbers: Lupin reported net sales of Rs.2,219cr, up 43.8% yoy, higher than our estimate. The company's gross margin came in higher at 63.1%, higher than last corresponding period (60.0%). This resulted in the OPM's coming in at 19.1%. However, inspite of the robust sales growth the net profit grew only by 33.5%yoy on account of higher taxation and interest expenditure to end the period at Rs.280cr.

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 22.2x and 18.7x 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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