The stock price of Lupin can gain as much as 13% from its current market price, supported by improvement in the pricing and competitive spirit of the US market, profitability and the large size of its new launch gSpiriva, and growth of other key businesses, a brokerage research report said. Elara Capital has put a target price of Rs 992 on Lupin stock, with an ‘accumulate’ rating; this is 13% higher than the current price of Rs 875.
The reasons for this upside could be the launch of various new products by the company – gSuprep, gDiastat and gPrezista, which are providing momentum to the US market. Not only this, the general improvement in the pricing and the competitive structure of the US market is also likely to boost the US business of Lupin.
Other key businesses – India, EMEA and the rest of the world – are also expected to add significant growth and value to the company’s margins, roughly 9-12%. Poor growth rate in India due to Covid and its impact on the business is expected to normalize in FY24.
The brokerage has raised Lupin’s core earnings estimates for the current financial year 2023-24 by 14%, due to the unexpected prior launch of gSpiriva. The core earnings estimates for FY25 and FY26 are also raised by 8-10%.
Lupin’s share price performance
The company’s share price has gained 9.29% over the past month to Rs 875 apiece on Thursday. It has gained 15.85% year-to-date, from Rs 628.