Feb'25 View on Lupin Limited

Lupin is an innovation-led transnational pharmaceutical company headquartered in Mumbai. Lupin develops and commercializes a wide range of branded and generic formulations, biotechnology products, and APIs in over 100 markets in the U.S., India, South Africa, and across the Asia Pacific (APAC), Latin America (LATAM), Europe, and Middle East regions. After making a high near 2400 the stock had fallen and now looks like it is reversing on back of following puts • LPC’s Q3FY25 sales stood at Rs5,768 cr (+11% yoy, our estimate was +2% versus). • EBITDA grew 31% yoy (6% above our estimate) with margin of 23.5% (+350 bps yoy). • Adjusted for the provision of Rs85.6 cr, EBITDA margin at 25% hit an 8-year high. • LPC delivered a 6% EBITDA beat in Q3FY25, led by traction across ex-ROW markets. • LPC has raised its FY25E margin guidance to 23-23.5%, compared to 22-23% earlier. • LPC’s FY26E US pipeline remains robust; we bake 14% US sales CAGR over FY24-26E. • Bunch of molecules lined up will ensure a limited earnings dip in FY27E. • We expect earnings per share (EPS) growth of 18.2% in FY26E/decline of 4.2% in FY27E.