Shares Drop As Brokerages Express Concerns Around Growth And Margin


  • Maintains a ‘hold’ rating and cuts the target price to Rs 793 apiece from Rs 809, implying an upside of 8%.

  • After-tax profits below estimates were impacted by a steep increase in other expenses and lower than expected revenue growth in key geographies—North America and India.

  • The North America business benefited from seasonal tailwinds and volume growth in albuterol sulphate and gSuprep.

  • Excluding the four new launches, U.S. base business has declined by around 22% year-on-year.

  • This was an outcome of ongoing price erosion and product discontinuation during the year.

  • gSpiriva’s launch has been postponed and is now expected to be in H1 of FY24.

  • In the near term, gSpiriva, Darunavir, Diazepam gel, and Nascobal nasal spray should get added to Lupin’s US portfolio.

  • In the medium term, LPC could receive U.S. FDA approvals for Pegfilgrastim, Dulera, and Glucagon, which could significantly pick up US revenues.

  • India business impacted by sluggish growth in the diabetes portfolio and loss of exclusivity in Ondero and Cidmus.

  • The company has expanded its field force by 1,000 MRs in India and is confident of growing by double digits.

  • The company expects to start delivering core Ebidta margins of 18–20% in FY24.

  • Brokerage expects that margin expansion to guided levels depends on the scale up of gSpiriva in the US.

  • Revised estimates are needed to factor in growth challenges in the India portfolio and high concentration risk (gSpiriva) in the US.

  • 1) Further delay in receiving approval for gSpiriva.

    2) Compliance issues at manufacturing facilities impacting future approvals.

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