Lupin reported Q3 FY25 revenue of Rs 56,186 million, up 10.6% YoY and 2.2% QoQ. Ebitda at Rs 13,659 million, surged by 33.7% YoY and 4.4% QoQ.
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Lupin Ltd.'s revenue (Rs 57,677 million) was in-line with our and consensus estimates but Ebitda (Rs 13,659 million) and net earnings (Rs 8,552 million) were significantly higher (14.7% and 16.6% respectively). The margin beat came primarily on the back of ramp up in high value products like Mirabegron in the US, and Luforbec and Namuscla in Europe.
US and EMEA markets were the key growth drivers. India growth was strong at 12%, but prescription growth lagged expectation and stood at 5%. EMEA and North America growth was 32.1% and 12.3% YoY.
Gross margins were higher by 333 bps YoY led by lower input costs, increased volumes and better product mix. Ebitda margins came in stronger led by improvement in gross margins. Lupin expects to sustain gross margins at current levels. We revise our forecasts on Lupin and recommend a Hold at CMP with a target price of Rs 2,126 based on 25x FY27E EPS.
Our FY27E estimates are revised upwards meaningfully as the company has incrementally guided for gSemaglutide launch in Canada and they expect one of their large launches expected in FY26 (gTolvaptan) to remain limited competition even after expiry of exclusivity.
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