Target: ₹2,400
CMP: ₹1,946.30
Lupin’s (LPC) Q1FY26 EBITDA stood at ₹1,640 crore (up 28 per cent y-o-y) and was in line with our estimates on the back of higher US sales supported by niche launches (gTolvaptan). Revenues grew 12 per cent y-o-y to ₹6,300 crore, vs our estimate of ₹6,400 crore. Miss was on account of lower India and API sales. US revenues came at $282mn, up 15% QoQ in line with our estimates.
LPC saw a remarkable turnaround in profitability with about a 2x jump in EBITDA over FY23-24, aided by better product mix, continued niche launches in the US, clearance from USFDA for facilities, domestic formulations regaining momentum and cost optimisation measures. Increased contribution from gTolvapton supported margins. GMs continue to remain strong at 71.3 per cent, up 160bps q-o-q, given better product mix in US markets. R&D expenses increased by 38 per cent y-o-y; 7.9 per cent of sales at ₹470 crore. The company booked a forex gain of ₹86 crore while the tax rate came in lower at 14 per cent. Resultant PAT at ₹1,220 crore, above our estimates.
We expect margins to sustain, given a strong pipeline in the US. Our FY26E and FY27E broadly remain unchanged. We maintain a Buy rating with TP of ₹2,400 (25x FY27E EPS). Any competition in gSpiriva and delay in new launches in the US will be key risks to our estimates.
Published on August 7, 2025
