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Research
Lupin - 2QFY2016 Result Update - Angel Broking
Posted On : 2015-11-12 10:07:05( TIMEZONE : IST )
For 2QFY2016, Lupin posted a poor set of numbers, with the OPM coming in lower than expected, and consequently the net profit as well. The company posted a 2.0% growth in sales to Rs. 3,178cr V/s Rs. 3,272cr estimated, mainly driven by the European markets. On the operating front, the Gross margin came in at 64.5% V/s 65.7% expected. Further, a 19.4% yoy and 36.2% yoy rise in the Staff cost and R&D expenditure led the OPM to come in at 16.6% V/s 24.6% expected and V/s 24.9% in 2QFY2015. Thus, the net profit came in at Rs. 408.5cr V/s Rs. 578.6cr expected and V/s Rs. 630.0cr in 2QFY2015, a yoy dip of 35.1%. We maintain our Neutral stance on the stock.
Below expectation numbers: The company posted a 2.0% yoy growth in sales to Rs. 3,178cr V/s Rs. 3,272cr estimated, mainly driven by European markets. Its key market US (Rs. 1,155cr), posted a dip of 9.2% yoy, on account of slow pace of approvals. The company launched 4 products in the US during the period. The company expects US sales to get normalized by 4QFY2016. Other key markets: India, Europe, Japan, South Africa and ROW, posted a growth of 9.4%, 32.2%, -6.5%, -5.6% and 52.9% yoy, respectively. On the operating front, the Gross margin came in at 64.5% V/s 65.7% expected. Further, a 19.4% and 36.2% rise in Staff cost and R&D expenditure led the OPM to come in at 16.6% V/s 24.6% expected and V/s 24.9% in 2QFY2015. Thus, the net profit came in at Rs. 408.5cr V/s Rs. 578.6cr expected and V/s Rs. 630.0cr in 2QFY2015, a yoy dip of 35.1%.
Outlook and valuation: We expect Lupin to post a CAGR of 14.6% in net sales to Rs. 16,561cr and earnings to report a 13.1% CAGR to Rs. 68.3/share over FY2015–17E. Currently, the stock is trading at 36.8x and 27.1x its FY2016E and FY2017E earnings, respectively. We remain Neutral on the stock.
Shares of LUPIN LTD. was last trading in BSE at Rs.1800.5 as compared to the previous close of Rs. 1790.55. The total number of shares traded during the day was 14848 in over 1192 trades.
The stock hit an intraday high of Rs. 1815.1 and intraday low of 1795.1. The net turnover during the day was Rs. 26778762.
