Buy Lupin, Says Investec After Stock Rating Upgrade; Share Price Target Hiked — What's Driving Growth?

Investec has upgraded Lupin from a 'Hold' to a 'Buy' rating, while also raising the target price to Rs 2,348 from the previous Rs 1,732. This positive outlook is backed by a robust performance in the US and India, as well as a strong product pipeline that is expected to drive earnings.

The brokerages' view is that the company's focus on speciality products and brand-building efforts will be key factors adding to its growth potential.

The upgrade and higher target price are attributed to several positive developments within Lupin, including earnings, US performance and product pipeline.

Investec has increased its Ebitda estimates for the financial years 2026 and 2027 by 23% and 10%, respectively, driven by a more optimistic forecast for the company's US business.

The company's US operations are experiencing strong growth, largely due to the performance of key products like Spiriva, gGle, and gFro. These products are making a significant contribution to Lupin's revenue and profitability.

Lupin's business in India is also performing well, showing consistent double-digit growth. The domestic market is a crucial part of the company's overall strategy.

Investec also noted that Lupin is developing injectables, such as glucagon, Risperdal, liraglutide, and ganirelix. These products are seen as more sustainable despite some competition.

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The company's focus on complex generics and biosimilars is expected to improve its long-term prospects. The brokerage also sees a strong product pipeline for new US launches, which could be a major driver of future growth.

Further, the note highlights that Lupin is a key player in the anti-diabetes and cardiac therapy markets in India. The brokerage anticipates the company will benefit significantly from the launch of semaglutide generics in India next year.

Investec expects Lupin's consumer, Digital Life, and diagnostics businesses to complement its branded generic business, allowing it to capture a larger share of the weight loss management market. The report noted that if competition is lower than expected, it could lead to the company outperforming forecasts, creating an upside risk to the broking's earnings estimates.