Shares of Lupin hit a 52-week high of Rs 796.55 in intraday trade on Monday, up 3% on the BSE, extending its gains following the January-March quarter (Q4FY23). Shares of the pharmaceutical company surpassed the previous high of Rs 788.90 on December 23, 2022.
Market prices for Lupin have soared 20% in the past month, while the S&P BSE Sensex has risen 4%. Last week, Lupin posted a 12% year-on-year growth in sales in Q4FY23, with a profit after tax of Rs 242.4 crore, compared to a loss of Rs 511.9 crore in the corresponding period of the previous fiscal year.
Revenue growth was driven by solid API business performance and sales growth in the US and domestic markets. In Q4FY22, Lupin posted a loss on higher costs, lower US prices and US-based Gavis’ impairment charge of Rs 126.7 crore.
The results beat market expectations, as analysts mostly expected the company to report revenue growth of 7-8% on the back of continued improvement in the US business (enteral drugs) and the domestic market.
Lupin’s better-than-expected Q4FY23 performance was fueled by healthy sales growth across segments and some benefits from the PLI scheme. The potential approval of g-Spiriva is further delayed by several months due to certain information requests from the USFDA.
However, Lupin is trading well above the price targets brokerages set after fourth-quarter earnings.
Motilal Oswal Financial Services has a “sell” call on the stock with a target price of Rs 640 per share.
Analysts at ICICI Securities maintained their “HOLD” rating, citing sensitivity to margin recovery on several US launches and ongoing cost rationalisation that has yet to deliver sustainable cost reductions and weak returns. The brokerage firm values the stock at Rs 740.
The stock trades above Prabhudas Lilladher’s price target of Rs 730 per share.