Lupin - 4QFY13 result update - Nirmal Bang

- Lupin's 4QFY13 results were better than expectations on all operating parameters, with earnings 29%/28% above our/Bloomberg consensus estimates, respectively.

- The boost came mostly from the domestic market, which grew 43%YoY owing to a low base and shortage of certain products in the market.

- We have incorporated FY13 numbers in our model and also factored in higher-than-earlier expansion in margins, owing to which our FY13/14E/15E EPS stand revised by 8%/6%/6%, respectively.

- We remain structurally positive on the stock owing to multiple triggers (Tricor, oral contraceptives, or OCs, including Yaz/Yasmin), but following the recent steep run-up in the stock price (up 18% over the past one month) we believe the current valuation factors in most of the upside.

- We have downgraded our rating on the stock from Buy to Hold with a revised target price of Rs772, valuing it at 20xFY15E EPS of Rs39.

Source : Equity Bulls

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