Lupin - Rating – Buy; Target Price – Rs1,200 - Centrum

- We expect Lupin's net sales to improve 13.9%YoY and 6.8%QoQ to Rs28.48bn. We expect the domestic business to grow at 10.7%YoY to Rs6.85bn from Rs6.19bn. We expect US, Europe formulation business to grow at 16.5%YoY to Rs12.80bn from Rs10.99bn.

- We expect Lupin's EBIDTA margin to improve by 70bps YoY to 24.9% from 24.2%.

- Lupin has entered into collaboration with Eli Lilly to market its insulin range of products in India and is likely to benefit from this.

- The company has received approval from US FDA for the following products and have launched the same in the US market. These are: generic Cymbalta capsules, Trizivir tablets, Trilipix delayed release capsules, Aciphex delayed release capsules, Zymaid ophthalmic solution. We expect Lupin to gain substantial MS in the US generic market for these products.

- The FII holding limit has been increased to 49% from 33%.

- We expect Lupin's net profit to grow by 33.9%YoY to Rs4.49bn from Rs3.35bn.

- Our target price of Rs1,200 is based on 22xDec'15 EPS of Rs54.5.

Source : Equity Bulls

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