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Geojit BNP
Lupin (Buy)
CMP: ₹1,452.15
Target: ₹1,667
Lupin is the fifth largest generic player in the US and the third largest Indian pharmaceutical company by sales. The company has successfully forayed into manufacturing of complex generics by investing heavily in R&D. US and Indian businesses contributed 43 per cent & 25 per cent respectively to overall revenue in FY16.
Key takeaways: a) Integration of US acquisition (Gavis) and launch of limited competition products will drive revenue growth by 17.9 per cent CAGR over FY16-19E.
b) Closure of Form-483 observations at Goa facility will trigger faster Abbreviated New Drug Application (ANDA) approval rate and drive US sales growth at 19.9 per cent CAGR over FY16-19E.
c) Domestic business to register robust growth driven by new launches (non-FDC) and higher contribution from in-licensing products.
d) Recently acquired Shionogi portfolio in Japan will strengthen the company’s Oncology, Cardiovascular and Anti-infective portfolios.
e) The company’s focus on complex products (R&D at 12.6 per cent of sales) will aid in sustaining growth and margins.
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