Lupin - 4QFY2013 Result Update - Angel Broking

For 4QFY2013, Lupin's net sales grew by 34.7% yoy to Rs. 2,537cr, just-in-line with our expectation of Rs. 2,466cr. However, the OPM for the quarter stood at 24.0%, higher than our estimate of 21.1%. Consequently, the Net profit came in at Rs. 408cr, higher than our expectation of Rs. 294cr. We continue to maintain our Buy on the stock.

Better-than-expected numbers: Lupin reported net sales of Rs. 2,537cr, up 34.7% yoy, just-in-line with our estimates. The company's gross margin came in higher at 64.4%, higher than in the last corresponding period (59.5%). This resulted in the OPM coming in at 24.0% vs 17.6% in 4QFY2012, and higher than our expectation of 21.1%. This resulted in the net profit growing by a robust 162% yoy to end the period at Rs. 408cr.

Outlook and valuation: We expect Lupin's net sales to post a 25.3% CAGR to Rs. 13,933cr and earnings to report a 29.1% CAGR to Rs. 41.8/share over FY2013-15E. Currently, the stock is trading at 21.0x and 17.5x FY2014E and FY2015E earnings, respectively. We maintain our Buy recommendation on the stock with a target price of Rs. 877.

Source : Equity Bulls

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