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Lupin:India's third largest pharmaceutical



Buy Above 910  Target 945 Holding 3-7 days.

Lupin was founded in 1968 by Dr. Desh Bandhu Gupta, then an Associate Professor at BITS-Pilani. Named after the Lupin flower because of its inherent qualities and what it personifies and stands for, the company was created with a vision to fight life threatening infectious diseases and to manufacture drugs of the highest social priority.

Lupin is amongst the larger pharma companies that is actively targeting the regulated generics markets. Historically very strong in the anti-TB segment, it has over the years built up expertise in fermentation-based products and segments like cephalosporins, prils and statins. Lupin is now a fully integrated company, with manufacturing capabilities in APIs and formulations and a direct marketing presence in the target markets.

Key highlights

In the process of building a strong pipeline for the US market through aggressive filings – benefits expected to flow in over the next couple of years.
Lupin is amongst the larger pharma companies that is actively targeting the regulated generics markets.Strategy of focusing on niche, low-competition products for the US market likely to benefit in the long run.

Valuation and view

Valuations at 27.6x FY14E and 21.3x FY15E EPS with high return ratios. Maintain Buy with price target of IN1,059 (25x FY15E EPS)