The brokerage upgraded the stock to “buy” from its earlier rating of “sell” and increased its price target to ₹2,260 from its previous target of ₹1,900. This indicates a 15.7% upside potential for Lupin’s shares from Tuesday’s close.
Citi wrote in its note that it expects a strong launch momentum in the US for the drug-maker and continued traction in its non-US business. It said the sales in US remain strong driven by Jynarque, a $1.5 billion brand. The launches in US may help the company sustain the strength in its margins, it said.
US President Donald Trump is considering imposing tariffs on pharmaceutical products starting April 2 and Citi believes that in case if these tariffs are imposed and not passed through, Lupin’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), could be impacted between 4% to 6%.
Lupin reported a profit after tax of ₹8,589 crore in the December quarter
, a 38.8% increase from the previous year’s ₹6,187 crore.
Its total revenue from operations was up 102.7% at ₹57,677 crore from last fiscal’s ₹51,974 crore.
The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) were up 25.1% in the third quarter at ₹14,096 crore. In the same quarter last year, the company’s EBITDA was at ₹10,673 crore.
Lupin’s EBITDA margin expanded to 21.1% in the December quarter against the previous year’s 21%.
Of the 37 analysts that have coverage on the stock, 22 have a “buy” rating, 10 have a “hold” rating and two have a “sell” rating.
Lupin shares gained 3.33% to hit an intraday high of ₹2,018.4 apiece on Wednesday, March 5. The stock was trading 2.66% higher at ₹2,005.1 apiece around 2pm. It has declined 15.2% this year, so far.
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