Lupin - Mahurat Picks 2012 - ICICIdirect

(Buying Range: Rs.590-Rs.565)

Lupin is well poised to register strong growth in the US generic space as the gap of filing and launches (176 approvals and just 42 launches cumulatively) assures sales traction for a sizable future, add to this, the potential upsides from FTFs and limited competition products (at least 10). The branded space is expected to get a boost from the launch of Suprax drops and chewable version.

Things are also improving in Japan where we expect improvement in gross margins once product supplies from Goa facility kick in. The India business is also slated to grow above industry average with chronic focus and new launches

The management has guided for ~100 bps improvement in EBITDA margins every year on the back of continuous improvement in product mix and cost rationalisation. We expect sales, EBITDA and PAT to grow at a CAGR of 24%, 27% and 29%, respectively, in FY12-14E. The stock is currently quoting at 18x FY14E EPS of Rs. 32.5.

Source : Equity Bulls

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