Lupin Ltd - Un-inspiring performance - Maintain Buy - Emkay

Reco: BUY
CMP: Rs 576
Target Price: Rs 630

- Lupin Q2FY13 Results, below expectations - a) Revenue up by 30% YoY to Rs23bn, b) EBIDTA up by 69% YoY to Rs5.2bn and c) APAT up by 30% YoY to Rs2.9bn

- US business grew 18% YoY to US$144mn but declined QoQ on back of Geodon loosing exclusivity. India grew 18% YoY and Japan grew 55% in JPY terms due to I'rom acquisition, however, organic growth was only 10%

- Gross margins contracted 250bps YoY & 170QoQ to 63%, however R&D cost declined to 4.2% of sales vs. usual run-rate of 7-8% which boosted EBITDA margins to 22%

- Going forward - Strong OC basket in the US coupled with robust India biz will drive Lupin's earnings CAGR of 22% over FY12-14E. Maintain Buy with a target price of Rs630 (20x FY14E EPS of Rs31.5)

Source : Equity Bulls

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