Lupin, Hitachi Energy, Berger Paints, Apollo Tyres, Brigade Enterprises, Crompton Greaves, V-Guard Q4 Review

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HDFC Securities Institutional Equities

Lupin - Strong Q4; growth and margin visibility improving

Ebitda was up 30% YoY, led by 11% YoY sales growth (US: +4% QoQ, India +7% YoY) and higher gross margin (+197 bps YoY), which was partly offset by higher staff/research and development/selling, general and administrative (+11/26/8%). Lupin expects-

1. the US to see steady growth in FY26 and sales rate may improve to ~$250+ million in FY26, led by traction in Tolvaptan (launched in May’25) and injectables (Glucagon, Liraglutide, Respirodon) in H2 FY26, steady traction in gSpiriva and gMyrbetriq, which will offset the sales erosion in Albuterol;

2. India to see double-digit-growth in FY26 and aims to beat IPM growth by 1.2-1.3x over the next few years, led by new launches/in-licensing, traction in focused therapies, scale-up in emerging therapies (gastro, VMN, CNS, and oncology), and MR addition (~10,400 in FY25 and to add 400-500 in FY26);

3. Ebitda margin to expand by 100 bps in FY26 (~24.1% in FY25); and

4. R&D see YoY growth in FY26 (towards niche pipeline respiratory, biosimilars, and injectable).

The company aims to scale up its specialty business over the next three-five years with key focus areas in respiratory and injectables; it looks to leverage its existing specialty products (Xopenex, NaMuscla, and Luforbec) for global markets. It expects to launch GLP-1 (Semaglutide) in India, Canada, and other EMs on patent expiry; it is backward integrated for orals and has a CMO arrangement for injectable.

M&A focus for late-stage specialty assets, complex generics, and brands will fill portfolio gaps in India. Factoring in FY25 beat, we raised our EPS by 7/3% for FY26/27E and revised the target price to Rs 2,270 (26x FY27E EPS).

Add stays, given visible growth in the US (new launches) and India (new launches and traction in key therapies), and improving margin (sales growth, cost controls) are intact.

Hitachi Energy - Margins drive earnings beat

Hitachi Energy India Ltd. reported a positive quarter, supported by increased order inflow from base ordering. Revenue/Ebitda/adjusted profit after tax beat/(miss) our estimates by 1.2/12/32.5%, respectively. Ebitda margin came in at 12.6% (+189.9/233.2bps YoY/QoQ) vs our estimate of 11.4%. In FY25, Order Inflow stood at Rs 181.7 billion (+228% YoY, including Rs 100bn HVDC order).

Transmission, Industries, Datacentres and Renewables momentum remains strong while rail/Metro witnessed moderation in momentum in FY25. Hitachi Energy has ~Rs 290 billion of OB (including Q1 FY26 Rs 100 billion HVDC order) of which ~Rs 200 billion is HVDC (2/3rd of OB).

We expect HVDC orders to be growth accretive and margins dilutive and we have incorporated same in our estimates. Hitachi Energy is undertaking Rs 20 billion of capex to expand capacities (over next five years, Rs 4 billion/year) in India to cater to both local and global demand.

With growth in volumes we expect positive margins trajectory to be maintained. Given the limited upside at current market price, we maintain our Add on Hitachi Energy, with an increased target price of Rs 16,862/share (60x Mar-27E EPS, rollover to Mar-27).

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