Add Lupin Ltd for the Target Rs.2,630 by Choice Institutional Equities
Launch Pipeline and Diversified Growth to Support Long-term Momentum
We maintain a positive view on the company, supported by meaningful launches in the US, from H2FY27E onwards and continued strength in India, while emerging and other markets are expected to sustain growth above the company average. As highlighted by the management in earlier concalls, EBITDA margin is likely to contract with increasing competition in key US products, such as Mirabegron and Tolvaptan. However, in the long term, we believe the company remains well-positioned to sustain growth, backed by its strong execution track record in scaling up new launches. We marginally revise FY27/28E estimate downwards by 0.3%/1.6% and continue to value the stock at 24x FY28E EPS. Our TP remains unchanged at INR 2,630 with an ADD rating
Strong Performance across all Metrics
* Revenue grew 31.9% YoY / 4.3% QoQ to INR 74,747 Mn (vs. CIE estimate: INR 68,143 Mn).
* EBITDA grew 88.1% YoY / 9.9% QoQ to INR 24,856 Mn; margin expanded 994 bps YoY / 170 bps QoQ to 33.3% (vs. CIE estimate: 30.3%).
* Reported PAT grew 89.0% YoY / 24.2% QoQ to INR 14,603 Mn (vs. CIE estimate: INR 13,476 Mn).
* For the quarter, the company reported an exceptional expense of INR 1,313 Mn toward legal settlements; adj. PAT stood at INR 15,604 Mn
US Growth to Normalise after Strong FY26 Launch-led Performance
North America delivered a robust growth in Q4 and FY26, primarily driven by Mirabegron, Tolvaptan and other complex injectable launches, with revenue crossing USD 1.3 Bn. Growth is expected to normalise, going forward, amid rising competition in Tolvaptan and Mirabegron. We expect low double-digit growth in FY27E, as most meaningful launches are back-ended towards H2FY27E. However, the impact should remain manageable, given the company’s strong execution track record in scaling up launches. Key pipeline launches include Valsartan, Ranibizumab and Dulera
Non-US Businesses Emerging as Strategic Growth Drivers
While market attention remains largely focused on the US, LPC’s non-US businesses are steadily gaining strategic importance, supported by rising contribution from chronic and specialty therapies. India is expected to continue outperforming IPM, driven by mix improvement and a strong launch pipeline (~20 launches in FY27E). Emerging markets will also deliver healthy growth, aided by Semaglutide launches in South Africa and Brazil, alongside relatively lower exposure to volatility. Other developed markets are expected to sustain double-digit growth, supported by contributions from VISUfarma and the Canada Semaglutide filing.
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SEBI Registration no.: INZ 000160131
