Drugmaker Lupin shares are likely to remain in focus after the drugmaker delivered a strong June-quarter performance that comfortably beat Street estimates, leading Macquarie to reiterate its 'Outperform' rating with a target price of Rs 2,750.
For brokerage, the story wasn't just about another earnings beat. It described the quarter as a "solid all-round beat", with stronger-than-expected operating performance, healthy execution across key geographies and sustained momentum in both developed and emerging markets reinforcing confidence in the company's growth trajectory.
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Macquarie's Take
- Maintained Outperform with a target price of Rs 2,750.
- Called the June quarter a "solid all-round beat".
- Said revenue, EBITDA and profit exceeded its estimates by 7%, 23% and 17%, respectively.
- Noted EBITDA margin of 29.8% was well above its 26% estimate, aided by stronger gross margins and operating leverage.
- Said US and India businesses remained broadly in line with expectations, while developed and emerging markets outperformed.
- Highlighted robust US execution despite pricing pressure, supported by new launches and healthy market share in key products.
- Expects a healthy pipeline with more than 15 product launches and over 15 ANDA filings during FY27.
Lupin reported a consolidated net profit of Rs 1,415 crore for the June quarter, up 16% year-on-year (YoY) and ahead of Bloomberg estimates. Revenue rose 32% to Rs 8,277 crore, while EBITDA surged 50% to Rs 2,463 crore, comfortably beating Street expectations.
Operating margin expanded 360 basis points to 29.8%, reflecting improved operating leverage and a favourable product mix.
Macquarie said Lupin's US business remained a key pillar of growth, with revenue rising 30% year-on-year (YoY) to $366 million, despite mid-single-digit price erosion in select products.
The brokerage also highlighted continued market share gains in key therapies, three product launches during the quarter and a strong pipeline expected to support future growth.
Outside the US, India revenues grew 14%, led by strong traction in chronic therapies and anti-diabetes products, while Europe, Latin America and other emerging markets also delivered robust double-digit growth.
With earnings comfortably ahead of expectations, improving margins and a healthy product pipeline, Macquarie believes Lupin has started FY27 on a strong footing.
Investors will now watch the management commentary during the earnings call for updates on upcoming launches, regulatory filings and whether the company can sustain its margin momentum through the rest of the financial year.
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