Gladiator Stocks - Lupin - ICICI Securities

Strategy

Buy Lupin in the range of Rs. 905.00-927.00 for target price of Rs. 1080.00 with a stop loss of Rs. 835.00. Time Frame: Six months

Technical View

The share price has undergone a higher base formation in the vicinity of 200 weeks EMA, at Rs. 920. Currently, the stock resolved out of past six week's consolidation (Rs. 920-810), indicating a resumption of primary up trend, thereby offering fresh entry opportunity with favourable risk reward.

Structurally, the stock has logged a resolute breakout from long term falling trend line backed by rising volumes, indicating conclusion of corrective phase. In the process, it retraced preceding six quarter's decline (Rs. 915-505) in just a single quarter. Faster pace of retracement signifies structural turnaround, auguring well for the next leg of the up move In a nutshell, the aforementioned structural development makes us confident that stock will accelerate upward momentum in coming months and head towards Rs. 1080 in coming months as it is 80% retracement of 2017-20 decline (Rs. 1229-505), at Rs. 1084, coinciding with October 2017 high of Rs. 1090.

Fundamental View

From a global leader in anti-tuberculosis (TB) and other infectious diseases to one of the fastest growing prescription companies in the US, Lupin has come a long way to emerge as a leading Indian generic exporter. Established in 1968, the company adapted well as per the changed industry dynamics like other peers such as Sun Pharma, Dr Reddy's and Cipla. Lupin ranks sixth in domestic formulations with a market share of 3.8%. The acute: chronic/ sub chronic ratio for the company is at 27:73. In terms of MR productivity, at ~Rs. 88 lakh per MR, it has one of the best MR productivity among large cap peers. Also, tie-ups with Eli Lilly, Boehringer for anti-diabetics and with MSD for pneumonia vaccines are some steps to bolster the domestic franchise. We expect India sales to grow at a CAGR of ~11.0% in FY20-22E to Rs. 6354 crore.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GladiatorStocks_Lupin_Jun20.pdf

Shares of LUPIN LTD. was last trading in BSE at Rs.928.6 as compared to the previous close of Rs. 919.05. The total number of shares traded during the day was 101444 in over 3657 trades.

The stock hit an intraday high of Rs. 936.45 and intraday low of 918.6. The net turnover during the day was Rs. 94286982.

Source : Equity Bulls

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