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Steady Growth Ahead, Backed by Pipeline and Margin Gains

LPC is expected to sustain its growth momentum, supported by a robust pipeline of ~200 products across key therapeutic areas and geographies. The company’s strategic focus on complex generics, Biosimilars, and specialty products, coupled with geographic diversification, positions it well for long-term growth. Additionally, EBITDA margins have shown healthy expansion and are expected to improve by ~100 bps annually.

We revise our earnings estimates marginally upward by 0.1%/0.8% for FY26E/FY27E, factoring in operating leverage and strong pipeline visibility. However, considering the ongoing legal overhang related to Mirabegron, we believe FY26 could witness some near-term softness, which should be offset in FY27 through new product launches and the ramp-up of Tolvaptan. In light of this, we downgrade our rating to ADD, with a revised target price of INR 2,270 (earlier INR 2,540), valuing the stock at an unchanged PE multiple of 25x on FY27E EPS.

Beat Across Metrics Led by Strong Performance and Margin Expansion:

Revenue grew 9.0% YoY / was flat QoQ to INR 56.7 Bn (vs. consensus estimate: INR 55.6 Bn). EBITDA increased 26.4% YoY but declined 1.2% QoQ to INR 12.9 Bn (vs. consensus estimates: INR 12.4 Bn); margins expanded 334 bps YoY / contracted 32 bps QoQ to 23.3% (vs. consensus: 22.4%). PAT rose 26.0% YoY but declined 9.4% QoQ to INR 7.7 Bn (vs. consensus estimate: INR 7.3 Bn).

India & US at the Core of LPC’s Growth Strategy:

LPC’s strategic focus on the US and India underpins its growth trajectory, with both geographies contributing ~76% to FY25 revenue. In the US, LPC has regained its position as the 3rd largest generics player by prescriptions, with the business expected to maintain double-digit growth. In India, it ranks as the 8th largest pharma company, anchored by its strong chronic therapies portfolio. The India business is expected to grow at 1.2–1.3x the market. Adjacent verticals in diagnostics, e-health, and consumer wellness (e.g., Softovac, Aptivate, Vita-Lyfe) further bolster its domestic ecosystem.

200+ Products Positioned to Deliver Sustained Global Growth:

LPC has built a robust pipeline with over 200 products lined up for launch over the next five years, indicating a strategic pivot towards complex generics, Biosimilars, and specialty formulations. These launches are planned across multiple geographies, reflecting the company’s expanding global footprint. Key upcoming products include Glucagon and Liraglutide from the GLP-1 portfolio, Biosimilars such as Ranibizumab (targeting both the US and EU markets), and Tolvaptan (already launched with 180 days exclusivity), among others. We believe this strong and diversified pipeline positions the company well to deliver meaningful growth in the coming years.

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