30 May 2020
4QFY20 Results Update | Sector: Healthcare
Lupin
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
LPC IN
452
326.3 / 4.6
882 / 646
-6/-15/-26
1304
CMP: INR870
TP: INR1,000 (+15%)
Buy
Operationally weak; Outlook for niche products promising
Almost done with resolution of regulatory issues at key sites
Financials & Valuations (INR b)
Y/E MARCH
2020 2021E 2022E
153.7 167.8 188.2
Sales
23.5 28.5 35.4
EBITDA
9.0 13.3 18.3
Adj. PAT
9.0 11.2 13.5
EBIT Margin (%)
19.8 29.5 40.5
Cons. Adj. EPS (INR)
-11.4 48.7 37.1
EPS Gr. (%)
276.7 296.8 326.9
Weak performance for the quarter
BV/Sh. (INR)
Ratios
Revenues in 4QFY20 were down 1.1% YoY to INR38.5b (v/s est. INR41.4b),
Net D:E
0.0
0.1
0.1
due to decline in US sales, partially offset by growth in the DF business.
6.8 10.3 13.0
RoE (%)
4.8
8.9 11.5
US sales were down 13.5% YoY to USD212m (42% of sales). APAC sales were
RoCE (%)
Payout (%)
-119.0 35.7 26.0
down 16% YoY to INR1.4b (4% of sales). On the other hand, DF sales (31% of
Valuations
sales) were up 13.3% YoY to INR11.9b. Also, EMEA (Europe, Middle East and
44.0 29.5 21.5
P/E (x)
Africa) sales were up 7.4% YoY to INR3.5b (9% of sales). API sales increased
EV/EBITDA (x)
16.8 14.4 11.4
12% YoY to INR3.3b (9% of sales).
Div. Yield (%)
1.0
1.0
1.0
FCF Yield (%)
17.7 -2.1
4.0
Gross margin (GM) declined 610bp YoY to 63.5% led by change in the
2.6
2.5
2.1
EV/Sales (x)
product mix. EBITDA margin at 13.7%, was down at similar rate of 630bp YoY
After three years of earnings decline, we expect Lupin’s (LPC) earnings
growth to improve over FY20-22E, based on robust ANDA pipeline (including
limited competition products like g-Albuterol/g-Fostair) and sustained
outperformance in the domestic formulation (DF) market. Accordingly, we
expect return ratios to form a trough in FY20, and thereafter, to be on an
uptrend. We are yet to see benefit of the cost rationalization exercise
implemented by LPC.
We have cut our EPS estimate by 14.5%/5% for FY21/FY22E to factor in the
COVID-19 led slowdown in DF and delay in better operating leverage. We
value LPC at 22x 12M forward earnings to arrive at a price target of
INR1,000. We remain positive on LPC due to (a) better visibility of
approvals/increased market share in niche products, and (b) the company
reaching end of remediation measures at its key sites under regulatory
issues. Maintain
Buy.
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Mar-20 Dec-19 Mar-19
46.9
46.9
47.0
16.6
14.6
12.2
22.7
24.7
25.9
13.9
13.8
15.0
FII Includes depository receipts
as higher employee cost (+170bp YoY as % of sales) was partially offset by
lower other expenses (-130bp YoY as % of sales). EBITDA came in at INR5.3b
(v/s est. INR6.4b), down 33% YoY.
Lupin had exceptional items, which included (a) profit on divestment of
Kyowa Pharma (INR1.2b), (b) impairment of intangible asset (INR95m), and
(c) loss on divestment of Kyowa Criticare – INR284m. It also had forex gain of
INR1.3b for the quarter.
Adj. PAT was flat at INR2.7b (v/s est. INR2.2b), due to lower tax rate.
FY20 sales/EBITDA/Adj. PAT was at INR154b/INR24b/INR9b. Revenues were
up 4.8% while EBITDA/Adj. PAT were down 8%/11% YoY.
No queries are pending for g-Albuterol; expected launch in 2HFY21. g-Fostair
should also be launched in Europe in 2HFY21 (market size: USD500m).
Despite being a 6-player market, the US is facing shortage of Albuterol.
R&D spend should be similar at absolute level of INR15b for FY21.
EBITDA margin is expected at 19-20% for FY21 without COVID/Forex impact.
Somerset would be LPC’s first site to be offered for re-inspection followed
by Goa and Pithampur.
LPC has 13% market share with a target to reach 20% for g-Levothyroxine.
Highlights from management commentary
Tushar Manudhane - Research Analyst
(Tushar.Manudhane@MotilalOswal.com); +91 022 6129 1536
Hitakshi Chandrani - Research Analyst
(Hitakshi.Chandrani@motilaloswal.com);
02261291557/
Bharat Hegde - Research Analyst
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
 Motilal Oswal Financial Services
Lupin
Valuation and view
The COVID-19 led weakness in Acute therapies would impact DF growth slightly
over the near term. Also, benefit of cost efficiency is yet to kick in. Hence, we
have reduced our earnings estimate by 14%/5% for FY21/FY22E. We value LPC
at 22x 12M forward earnings to arrive at price target of INR1,000.
We expect 40% earnings CAGR over FY20-22E, led by niche launches (g-
Albuterol - no more queries pending with the USFDA; g-Fostair in EU), improving
market share in Levothyroxine in the US, and better-than-industry growth in DF.
Maintain Buy.
(INR m)
FY19
FY20E FY20E % Var
4QE
153,748 41,424
-7.2
4.8
-6.0
130,200 35,021
23,548 6,403
-18.0
-8.0
-31.2
9,702 2,600
13,846 3,802
-19
-41
3,630
920
3,578
762
6,261
0
7,533 3,644
35.9
11,571 1,405
153.6
38.5
-43
-13
-3,995 2,252
73.0
8,966 2,151
19.0
-11.4
-33.3
5.8
5.2
Quarterly Perf. (Consoli.)
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
YoY Change (%)
Depreciation
EBIT
YoY Change (%)
Interest
Other Income
EO Exp/(Inc)
PBT
Tax
Rate (%)
Minority Interest
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
1Q
38,559
-0.4
31,481
7,079
-7.9
2,590
4,489
-11.6
687
34
0
3,836
1,811
47.2
-4
2,028
2,028
-43.4
5.3
FY19
FY20
2Q
3Q
4Q
1Q
2Q
3Q
39,511 39,473 38,866 44,184 38,822 37,693
0.0
-0.7
-3.6
14.6
-1.7
-4.5
34,014 32,657 31,074 35,582 32,416 33,002
5,496 6,816 7,793 8,602 6,406 4,691
-35.6
-1.0
9.9
21.5
16.5
-31.2
2,655
2,190
2,191
3,171
2,526
2,532
2,842 4,627 5,602 5,431 3,880 2,159
-51.1
13.4
28.5
21.0
36.5
-53.3
738
785
843
856
826
886
2,307
402
733
722 1,280
936
0 3,422
-22
0 5,465
3,287
4,410
822 5,514 5,297 -1,131 -1,078
1,729
2,454
2,943
2,280
695
7,670
39.2 298.6
53.4
43.0
-61.5 -711.4
21
-115
-324
-13
-556
-398
2,660 -1,518 2,896 3,031 -1,271 -8,350
2,660 2,873 2,561 3,031 3,373 1,834
-41.5
11.5
-31.6
49.4
26.8
-36.2
6.7
7.3
6.6
6.9
8.7
4.9
4Q
38,457
-1.1
33,204
5,253
-32.6
2,143
3,111
-44.5
1,074
826
-2,091
4,954
1,051
21.2
7
3,896
2,559
-0.1
6.7
Note:
Quarterly nos will not add up to full year nos due to restatement of past quarters
Key performance Indicators (Consolidated)
Y/E March
INR m
1Q
Domestic formulations
11,924
YoY Change (%)
27.9
US formulations
11,858
YoY Change (%)
(26.0)
Europe
1,416
YoY Change (%)
10.0
Japan
5,000
YoY Change (%)
0.0
ROW
3,967
YoY Change (%)
8.8
API
3,581
YoY Change (%)
28.2
Cost Break-up
RM Cost (% of Sales)
37.5
Staff Cost (% of Sales)
19.4
R&D Expenses(% of Sales)
9.9
Other Cost (% of Sales)
15.0
Gross Margins (%)
62.5
EBITDA Margins (%)
18.4
EBIT Margins (%)
11.6
FY19
2Q
3Q
12,032 11,902
3.8
11.4
12,487 14,174
(8.3)
(1.0)
1,526
1,330
1.5
(1.9)
5,298
5,905
10.9
10.6
4,219
4,740
(8.4)
2.7
3,347
3,624
26.3
35.2
35.3
20.1
9.7
21.2
64.7
13.9
7.2
35.7
18.8
10.2
19.4
64.3
16.1
11.7
146,646
-7.2
121,038
25,607
-18.6
8,461
17,147
-16.8
3,025
3,330
3,400
14,052
8,879
63.2
52
5,121
10,123
-30.0
6.9
4Q
10,525
9.1
17,406
16.1
1,705
(6.2)
0
(100.0)
5,522
5.1
2,912
3.7
30.4
18.2
0.0
31.3
69.6
20.0
14.4
1Q
13,077
9.7
15,412
30.0
1,434
1.3
5,911
18.2
4,235
6.8
3,489
(2.6)
35.1
18.3
8.6
18.6
64.9
19.5
12.3
FY20
2Q
13,419
11.5
13,244
6.1
1,724
13.0
5,072
(4.3)
5,017
18.9
3,052
(8.8)
35.0
19.5
10.0
18.7
65.0
16.8
10.0
3Q
12,969
9.0
13,766
(2.9)
1,526
14.7
0
(100.0)
5,727
20.8
3,173
(12.4)
36.1
19.7
11.3
20.5
63.9
12.4
5.7
4Q
11,921
13.3
15,791
(9.3)
1,855
8.8
0
NA
5,058
(8.4)
3,286
12.8
36.5
19.9
9.0
21.0
63.5
13.7
8.1
FY19
46,382
12.4
55,924
(5.1)
6,163
2.3
21,746
2.2
17,912
0.0
13,464
23.2
34.5
19.3
11.0
19.7
65.5
17.5
10.1
FY20
51,385
10.8
58,212
4.1
6,391
3.7
0
NA
21,000
0.0
12,999
(3.5)
35.9
19.7
10.3
20.1
64.1
15.3
9.0
30 May 2020
2
 Motilal Oswal Financial Services
Lupin
Conference call highlights
LPC does not intend adding MRs in its India business over the medium term.
60% of the prescription is generic in case of Albuterol Sulfate.
LPC hopes to get approval soon for g-Spiriva; however, it does not plan to
launch g-Spiriva for the next couple of years.
Capex – INR5b for FY21.
ETR expected at 34-35% for FY21, should gradually decline in subsequent years.
One batch of Metformin could be recalled due to impurity issue.
Key exhibits
Exhibit 1: US business declined 9.3% YoY (INR terms)
US Sales (INR b)
15.0
11.9
-8.3
-21.1
-26.0
12.5
-1.0
16.1
6.1
-2.9
-9.3
15.8
9.8
3.8
9.6
11.9
11.9
10.5
13.1
13.4
13.0
11.9
YoY Growth (%)
30.0
Exhibit 2: Domestic business grew 13.3% YoY
27.9
India Sales (INR b)
YoY Growth (%)
12.0
11.4
9.1
9.7
11.5
13.3
9.0
14.2
17.4
15.4
13.2
13.8
Source: MOFSL, Company
Source: MOFSL, Company
Valuation view
DF (34% of sales) on steady footing
LPC has been performing better than market with 11% CAGR in DF sales over
FY16-20. There could be some slowdown in the near term due to decreased
prescription rate in Acute therapies. This should be offset to some extent by
Chronic therapies due to pre-buying and the fact that it has higher share (~60%)
in LPC’s DF portfolio. Based on LPC’s established presence as well as better
reach, we expect the company to garner 10.5% CAGR in DF sales over FY20-22E.
US generics (38% of sales) – Niche launches to drive growth
LPC had 15 ANDA approvals and 18 launches in FY20, taking the cumulative
approvals/launches to 146/101 over FY16-20. Incremental business from new
launches was more than offset by the higher price erosion in the base business
till FY19. Thus, US sales stood at USD777m from USD914m in FY16. FY20 is the
first year to exhibit YoY growth with US sales of USD800m, led by lesser intensity
of price erosion, product specific exclusive sales and new launches.
LPC has indicated that no queries are pending with the USFDA regarding g-
Albuterol. Further, the company continues to strengthen its market share in g-
Levothyroxine; it aims to increase market share from current double-digit to
20%+ over the medium term. Also, we expect regulatory headwinds to abate as
LPC is in the last phase of completing remediation measures at sites under issue
3
30 May 2020
 Motilal Oswal Financial Services
Lupin
and is readying for re-inspection. Based on this and LPC’s robust ANDA pipeline
(158) pending approval, we expect US sales CAGR at 12% to USD990m over
FY20-22E.
Return ratios to be on an uptrend
We expect 40% earnings CAGR over FY20-22E, led by niche launches (g-
Albuterol - no more queries pending with the USFDA; g-Fostair in EU), improving
market share in the US for Levothryoxin and better-than-industry growth in DF.
Accordingly, we expect RoE to improve from 7% in FY20 to 13% by FY22E.
The COVID-19 led weakness in Acute therapies should impact DF growth slightly
in the near term. Also, benefit of cost efficiency is yet to kick in. Hence, we have
reduced our earnings estimate by 14%/5% for FY21/FY22E. We value LPC at 22x
12M forward earnings to arrive at a price target of INR1,000. Maintain
Buy
Exhibit 4: P/B chart
Exhibit 3: P/E chart
P/E (x)
55.0
45.0
35.0
25.0
15.0
5.0
Min (x)
Avg (x)
+1SD
35.3
27.2
19.0
15.4
Max (x)
-1SD
45.2
24.9
P/B (x)
Min (x)
9.0
7.0
5.0
3.0
1.0
Avg (x)
+1SD
Max (x)
-1SD
8.2
5.8
4.6
3.3
3.5
2.4
Source: MOFSL, Company, Bloomberg
Source: MOFSL, Company, Bloomberg
30 May 2020
4
 Motilal Oswal Financial Services
Lupin
Story in charts
Exhibit 5: Revenue mix in 4QFY20
RoW
API 1%
9%
APAC
4%
India
31%
Europe
10%
USA
42%
11
12
12
Exhibit 6: Growth to pick up in niche launches
Formulations (INR b)
11
API (INR b)
11
16
14
14
16
LATAM
3%
100
114
125
160
145
148
137
152
170
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E
Exhibit 7: R&D spend as % of sales to remain stable
R&D expense (INR b)
% of sales
Exhibit 8: Margins to pick up from FY20
EBITDA (INR b)
26.6
28.3
26.4
25.7
19.9
17.5
15.3
17.0
18.8
EBITDA margin (%)
8.6
11.3
13.2
11.7
10.7
10.1
9.1
9.5
11.0
FY15
16.0
FY16
23.1
FY17
18.5
FY18
15.7
FY19
15.5
FY20
15.3
17.9
30.0
36.2
37.5
44.9
31.5
25.6
23.5
28.5
35.4
FY21E FY22E
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E
Exhibit 9: Expect EPS CAGR of ~40% over FY20-22E
EPS (INR/ share)
Exhibit 10: Rich ANDA pipeline
Cummulative ANDAs filed
368
Pending ANDAs
402
422
430
343
192
93
38.7
53.5
50.4
56.6
32.0
13.4
19.8
29.5
40.5
FY14
FY15
FY16
210
99
163
154
162
157
158
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E
FY17
FY18
FY19
FY20
Source: MOFSL, Company, Bloomberg
30 May 2020
5
 Motilal Oswal Financial Services
Lupin
Financials and Valuations
Income Statement
Y/E March
Net Sales
Change (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income - Rec.
PBT before EO item
EO Expense/(Income)
PBT after EO item
Tax
Tax Rate (%)
Less: Minority Interest
Reported PAT
PAT Adj for EO items
Change (%)
Margin (%)
2014
112,866
17.1
30,028
26.6
2,610
27,418
267
165
27,317
-1,000
28,317
9,622
34.0
331
18,364
17,364
32.1
15.4
2015
127,700
13.1
36,196
28.3
4,347
31,849
98
2,398
34,148
0
34,148
9,704
28.4
412
24,032
24,032
38.4
18.8
2016
142,085
11.3
37,534
26.4
4,635
32,899
446
1,877
34,330
0
34,330
11,536
33.6
88
22,707
22,707
-5.5
16.0
2017
174,943
23.1
44,931
25.7
9,122
35,809
1,525
1,065
35,349
0
35,349
9,785
27.7
-11
25,574
25,574
12.6
14.6
2018
158,041
-9.7
31,475
19.9
10,859
20,616
2,044
1,504
20,076
14,644
5,433
2,885
53.1
36
2,512
14,455
-43.5
9.1
2019
146,646
-7.2
25,607
17.5
8,461
17,147
3,025
3,330
17,452
3,400
14,052
8,879
63.2
52
5,121
10,123
-30.0
4.1
2020
153,748
4.8
23,548
15.3
9,702
13,846
3,630
3,578
13,794
6,261
7,533
11,571
153.6
-43
-3,995
8,966
-11.4
5.8
2021E
167,839
9.2
28,533
17.0
9,680
18,853
3,006
3,650
19,496
0
19,496
6,044
31.0
124
13,328
13,328
48.7
7.9
(INR Million)
2022E
188,167
12.1
35,375
18.8
10,046
25,330
2,607
3,550
26,273
0
26,273
7,882
30.0
124
18,266
18,266
37.1
9.7
Consolidated Balance Sheet
Y/E March
Equity Share Capital
Other Reserves
Total Reserves
Net Worth
Minority Interest
Deferred liabilities
Secured Loan
Unsecured Laon
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Investments
Goodwill & Intangibles
Curr. Assets
Inventory
Account Receivables
Cash and Bank Balance
Others
Curr. Liability & Prov.
Account Payables
Provisions
Net Current Assets
Appl. of Funds
2014
897
68,419
68,419
69,316
669
1,779
1,968
4,024
5,992
77,756
45,638
19,283
26,355
3,041
1,785
7,202
62,970
21,295
24,641
7,975
9,060
23,597
18,818
4,779
39,374
77,756
2015
899
87,842
87,842
88,741
241
1,182
1,018
3,692
4,710
94,874
45,445
19,174
26,271
5,760
16,584
17,411
64,510
25,036
26,566
4,814
8,095
35,662
28,299
7,363
28,848
94,874
2016
901
108,943
108,943
109,844
321
1,239
53,739
17,454
71,193
182,596
55,887
23,262
32,625
9,812
75
73,586
107,473
31,787
45,498
8,379
21,808
40,975
32,318
8,658
66,498
182,596
2017
903
134,072
134,072
134,975
345
-1,128
61,243
23,183
84,426
218,619
55,265
8,902
46,363
7,150
220
78,147
129,117
36,423
43,073
27,994
21,626
42,378
34,576
7,801
86,739
218,619
2018
904
134,866
134,866
135,771
401
-4,310
67,722
4,518
72,240
204,101
63,687
14,613
49,074
9,563
267
70,965
126,019
36,625
51,922
16,429
21,043
51,788
43,568
8,220
74,231
204,100
2019
905
136,517
136,517
137,422
469
-4,457
70,546
15,802
86,347
219,781
72,189
23,073
49,115
10,186
1,856
67,963
143,033
38,368
51,498
30,971
22,197
52,372
41,390
10,982
90,661
219,782
2020
906
124,461
124,461
125,367
445
252
25,180
24,928
50,108
176,172
76,431
32,776
43,656
7,582
361
37,540
158,957
34,569
54,459
47,926
22,004
71,924
59,884
12,040
87,034
176,172
2021E
903
133,113
133,113
134,016
530
252
15,179
24,928
40,107
174,904
83,722
42,455
41,267
7,141
361
37,540
144,175
44,526
55,682
21,895
22,072
55,577
43,537
12,040
88,598
174,904
(INR Million)
2022E
903
146,703
146,703
147,606
615
252
5,179
24,928
30,107
178,580
90,292
52,501
37,791
6,920
361
37,540
155,334
48,551
64,308
20,329
22,146
59,365
47,325
12,040
95,969
178,580
30 May 2020
6
 Motilal Oswal Financial Services
Lupin
Financials and Valuations
Ratios
Y/E March
EPS (Fully Diluted)
Cash EPS (Fully Diluted)
BV/Share
DPS
Payout (%)
Valuation (x)
P/E (Fully Diluted)
EV/Sales
EV/EBITDA
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Asset Turnover (x)
Fixed Asset Turnover (x)
Debtor (Days)
Creditor (Days)
Inventory (Days)
Leverage Ratio
Current Ratio
Interest Cover Ratio
Debt/Equity (x)
2014
38.7
44.5
154.6
6.0
16.0
22.5
3.5
13.0
28.6
26.5
29.7
1.5
4.5
80
152
69
2.7
102.9
0.0
2015
53.5
63.1
197.4
7.5
16.9
16.3
3.1
10.9
30.4
29.1
34.4
1.3
4.9
76
172
72
1.8
324.7
0.0
2016
50.4
60.7
243.8
7.5
17.9
17.3
3.2
12.2
22.9
16.8
18.8
0.8
4.8
117
186
82
2.6
73.7
0.6
2017
56.6
76.8
298.9
7.5
15.9
15.4
2.6
10.0
20.9
13.3
14.9
0.8
4.4
90
189
76
3.0
23.5
0.4
2018
32.0
56.0
300.3
5.0
108.5
27.2
2.8
14.3
10.7
4.9
5.4
0.8
3.3
120
178
85
2.4
10.1
0.4
2019
13.4
32.1
303.7
5.0
53.3
64.9
3.1
17.5
7.4
3.5
3.6
0.7
3.0
128
184
95
2.7
5.7
0.4
2020
19.8
41.2
276.7
9.0
-119.0
44.0
2.6
16.8
6.8
4.8
5.1
0.9
3.3
129
162
82
2.2
3.8
0.0
2021E
29.5
51.0
296.8
9.0
35.7
29.5
2.5
14.4
10.3
8.9
9.8
1.0
4.0
121
139
97
2.6
6.3
0.1
2022E
40.5
62.7
326.9
9.0
26.0
21.5
2.1
11.4
13.0
11.5
12.0
1.1
4.8
125
139
94
2.6
9.7
0.1
Cash Flow Statement
Y/E March
EBITDA
Interest/Dividends Recd.
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
EO expense
CF from Op. incl EO Exp.
(inc)/dec in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from Investments
Change in Net Worth
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
2014
30,028
165
-9,475
-4,368
16,349
-1,000
17,349
-6,098
10,251
-1,764
-7,862
1,593
-4,248
-267
-2,939
-5,861
3,626
4,349
7,975
2015
36,196
2,398
-10,300
7,364
35,657
0
35,657
-17,191
18,466
-14,799
-31,991
-1,389
-1,282
-98
-4,058
-6,828
-3,161
7,975
4,814
2016
37,534
1,877
-11,479
-34,084
-6,152
0
-6,152
-71,217
-77,369
16,509
-54,708
2,459
66,483
-446
-4,071
64,425
3,565
4,814
8,379
2017
44,931
1,065
-12,152
-626
33,219
0
33,219
-24,759
8,460
-145
-24,904
3,669
13,233
-1,525
-4,076
11,300
19,615
8,379
27,994
2018
31,475
1,504
-6,067
942
27,853
14,644
13,210
-8,801
19,053
-47
-8,848
1,028
-12,187
-2,044
-2,725
-15,927
-11,565
27,994
16,429
2019
25,607
3,330
-9,026
-1,888
18,023
3,400
14,623
-6,123
11,900
-1,589
-7,712
-724
14,108
-3,025
-2,728
7,631
14,542
16,429
30,971
2020
23,548
3,578
-6,862
20,583
40,847
6,261
34,586
28,785
69,631
1,496
30,280
-3,286
-36,240
-3,630
-4,755
-47,911
16,955
30,971
47,927
2021E
28,533
3,650
-6,044
-27,594
-1,455
0
-1,455
-6,850
-8,305
0
-6,850
37
-10,001
-3,006
-4,755
-17,726
-26,031
47,926
21,895
2022E
35,375
3,550
-7,882
-8,937
22,106
0
22,106
-6,350
15,756
0
-6,350
39
-10,000
-2,607
-4,755
-17,323
-1,566
21,895
20,329
30 May 2020
7
 Motilal Oswal Financial Services
Lupin
NOTES
30 May 2020
8
 Motilal Oswal Financial Services
Lupin
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
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SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
30 May 2020
9
 Motilal Oswal Financial Services
Lupin
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
The associates of MOFSL may have:
-
financial interest in the subject company
-
actual/beneficial ownership of 1% or more securities in the subject company
-
received compensation/other benefits from the subject company in the past 12 months
-
other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on
the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL
even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
-
acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
-
be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
-
received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
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informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
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document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
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all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
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The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
30 May 2020
10