9 November 2016
2QFY17 Results Update | Sector: Healthcare
Lupin
Buy
BSE SENSEX
27,253
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
S&P CNX
8,432
LPC IN
447.5
684.3 / 10.2
1912 / 1294
5/-11/-22
2300
53.3
CMP: INR1,529 TP: INR1,825(+19%)
Mixed quarter; margin improvement is key
Financials & Valuations (INR b)
Y/E Mar
2016 2017E 2018E
Sales
142.1 174.6 205.6
EBITDA
37.5
45.2
55.1
Adj. PAT
22.7
27.7
34.7
Adj. EPS (INR)
50.4
61.6
77.0
EPS Gr. (%)
-5.7
22.2
25.1
BV/Sh. (INR)
243.8 295.6 362.1
RoE (%)
22.9
22.8
23.4
RoCE (%)
16.8
15.3
16.4
P/E (x)
30.3
24.8
19.9
P/BV (x)
6.3
5.2
4.2
Estimate change
TP change
Rating change
Lupin’s (LPC) 2QFY17 revenue grew 34% YoY to INR42.9b (in-line). Gross margin
remained stable QoQ at 71.0% (est. of 69%). EBITDA improved 55% YoY to
INR10.3b (~10% below estimate), with margin of 24% coming in below our
estimate of 26.5%. Despite better gross margin, EBITDA margin was lower,
primarily due to higher R&D as % of sales at 13.6% (+ ~200bp YoY and QoQ)
and forex loss of INR450 above EBITDA. PAT of INR 6.6b was ~4% below our
estimate due to lower EBITDA, partially offset by a lower tax rate of 19% (v/s
normalized rate of ~25-28%).
New product approvals key for growth:
Despite flat sequential sales for
gGlumetza, US sales stood at USD292m (v/s USD322m in 1Q). This was because
of increased competition in gFortamet (lost 6% market share), high-single-digit
price decline in base business, and no growth in Gavis portfolio. New
competition in gGlumetza and gFortamet will put pressure in 3QFY17. Having
said that, 10 expected launches scheduled in 2H (including gMinastrin 24FE
FTF, gWellbutrin XL, Potassium Chloride and 2 controlled substance products)
and ramp-up of Methergine will help drive growth.
Recovery in India post muted 1Q:
India business grew ~12% YoY post muted
1Q (+ ~5% YoY). LPC expects to deliver double-digit growth for rest of FY17.
Key earnings call takeaways:
1) ~10 and 30 ANDA launches expected in
2HFY17 and FY18E, respectively. 2) Albuterol inhaler filing expected in 3Q. 3)
Tax rate guidance of 25%. 4) 23% of products in domestic market under NLEM.
5) Guidance for Gavis sales brought down to ~USD250m for FY18 (v/s
USD300m earlier) due to slow ramp-up. 6) EBITDA margin guidance of 26-28%
for next few quarters. 7) Shionogi acquisition will be completed in 3QFY17. 8)
Constant currency growth in Japan will be ~10-15% in the medium term.
Valuation view:
Although competition in key products can put pressure on
margins in near term, launch of key products from 2HFY17 will help offset this
impact. Maintain
Buy
with TP of INR1,825 @ 22x 1HFY19E PER (v/s INR1,850 @
23x FY18E PER). We cut target multiple and FY17E/FY18E EPS by ~5-6%, mainly
on slower Gavis ramp-up, higher R&D and competition in key products.
(INR Million)
4Q
41,707
35.5
13,050
31.3
1,487
213
349
11,699
4,188
35.8
51
7,479
36.7
17.9
1Q
44,677
41.6
13,080
29.3
2,027
320
826
11,560
2,734
23.7
6
8,820
55.1
19.7
FY17
2Q
3QE
42,905 42,453
28.9
19.4
10,281 10,499
24.0
24.7
2,112
2,110
263
350
271
600
8,177
8,639
1,589
2,300
19.4
26.6
8
98
6,622
6,241
58.0
17.8
15.4
14.7
FY16
4QE
44,538
6.8
11,354
25.5
2,073
277
603
9,606
2,672
27.8
263
6,671
-10.8
15.0
142,085
11.3
37,534
26.4
4,635
446
1,877
34,330
11,536
33.6
88
22,707
-5.5
16.0
FY17E 2QFY17 % Var
Est
174,574 43,301
-0.9
22.9
30.4
45,215 11,487
-10.5
25.9
26.5
8,322
2,050
1,210
350
2,300
600
37,982
9,687
-15.6
9,496
2,700
25.0
27.9
375
85
28,112
6,902
-4.1
23.8
68.8
16.1
15.9
Quarterly Performance (Consolidated)
Y/E March
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Minority Interest
Recurring PAT
YoY Change (%)
Margins (%)
1Q
31,561
-5.5
8,248
26.1
1,014
70
757
7,921
2,258
28.5
-3
5,686
-9.0
18.0
FY16
2Q
3Q
33,297 35,558
4.9
11.9
6,626
8,772
19.9
24.7
1,155
1,114
241
92
578
653
5,809
8,219
1,591
2,909
27.4
35.4
27
13
4,198
5,298
-33.4
-11.9
12.6
14.9
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Kumar Saurabh
(Kumar.Saurabh@MotilalOswal.com); +91 22 6129 1519
Gaurav Tinani
(Gaurav.Tinani@motilaloswal.com)
 Motilal Oswal Financial Services
Lupin
Higher R&D, other expenses led to margin miss
Lupin's 2QFY17 net revenues grew 24% YoY to INR42.9b (in line with estimate).
Limited competition gGlumetza, gFortamet coupled with consolidation of Gavis
continued to support US revenues (up 73% YoY). India business grew 12%YoY to
INR9.9b, largely in line with estimates. Japan business recorded 35%YoY growth
during this quarter, supported by currency tailwinds. Japan constant currency
growth remained modest at 10%YoY. ROW business (EMEA, APAC ex-Japan, LATAM)
exhibited weak performance, with revenues declining 6% YoY in 2QFY17.
EBITDA increased 55%YoY to INR10.3b (v/s estimate of INR 11.4b, 10% miss). EBITDA
margin miss of 250bp (24.0% vs 26.5% est) was primarily attributable to higher than
expected R&D expenses and other expenses (which includes INR450m forex loss).
R&D expenses were up 170bpYoY to 13.3% of sales (+47%YoY growth in absolute
terms).
Exhibit 1: gGlumetza continued to support 2QFY17 revenues
Sales (INR b)
36
18
9
26
30
31
33
31
31
21
20
18
5
0
(6)
41
32
34
2
7
43
YoY Growth (%)
34
41
24
25
26
Exhibit 2: Higher R&D expenditure impaired Ebitda margins
EBITDA (INR b)
33
26
28
26
26
20
25
EBITDA margin (%)
31
29
24
31 31
42
6
7
8
11
8
9
8
8
7
9
13
13
10
Source: Company, MOSL
Source: Company, MOSL
Exhibit 3: Scale up in R&D expense to continue through FY17
R&D expense (INR b)
10
10
% of sales
12
11
13
12
Exhibit 4: Gross margins contracted 50bp sequentially
Gross Profit (%)
68
62
68
66
67
69
68
65
Gross Margin (%)
73
67
71
70
8
8
9
8
7
9
8
66
2
3
2
2
3
3
3
3
4
4
5
5
6
18
19
21
22
20
21
21
21
21
22
30
31
30
Source: Company, MOSL
Source: Company, MOSL
US Generic business - (47% of sales)
US business grew 73%YoY to INR19.9b (USD292m), led by sales of limited
completion products namely gGlumetza and gFortamet coupled with
consolidation of Gavis financials (~USD25m).
The Company launched 2 products in the US in 2QFY17. Cumulatively LPC is
marketing 124 products in US market, as of end 2QFY17. LPC is the market
leader in 42 products and amongst top 3 in 79 of its marketed products. The
company currently has 142 ANDA’s pending approval in the US which includes
45 FTF opportunities (25 exclusive opportunities). Going forward, LPC expects to
2
9 November 2016
 Motilal Oswal Financial Services
Lupin
launch 25-30 generic products in FY18E, which will support 29% growth
momentum over FY16-19E, along with Gavis’ portfolio.
Exhibit 5: US revenues: Generic business continues to drive growth
US Generics (USD m)
27
214
17
15
246
195
US Branded (USD m)
15
21
21
17
149
24
195
22
195
23
199
10
170
10
168
15
201
302
301
301
Source: Company, MOSL
India business – (~24% of sales)
In 2Q, domestic business exhibited a robust performance and grew 12%YoY to
INR9.9b. Lupin launched 8-9 products (in-licensed +FTF) in the domestic market
in 1HFY17. Currently 23% of the company’s domestic portfolio is under price
control
Management commentary indicated domestic business growth to rebound to
15%-20%YoY in the near term. We build in 14% CAGR over FY16-19E.
Japan (~10% of sales)
Japanese business increased 35%YoY to INR4.4b, buoyed by steep rupee
depreciation YoY. In constant currency, business grew 10% YoY to JPY6.7b.
The management is confident of growing Japan business at 10-15%YOY over
next few years, supported by new launches and increased generic penetration
(80% generic penetration over the next 3 years, from 56% currently).
The company is currently building one oral solid dosage facility and one
injectable facility to specifically cater to demand from the Japanese market.
Shionogi acquisition will be completed in 3Q FY17. The acquisition will make
Lupin the 7
th
largest generic company in Japan (10
th
largest generic currently)
Exhibit 7: Translational currency tailwinds buoyed growth
Japan Sales (INR b)
17
17
YoY Growth (%)
31
9
-8
4
3
3
3
3
-9
3
-5
3
-7
3
4
3
4
4
17
35
Exhibit 6: Domestic growth rebounded in 2QFY17
India Sales (INR b)
29
20
9
7
14
7
2
6
8
8
14
7
15
16
17
11
9
9
15
7
8
9
YoY Growth (%)
12
12
10
-6
3
2
7
9
Source: Company, MOSL
Source: Company, MOSL
9 November 2016
3
 Motilal Oswal Financial Services
Lupin
Highlights from Earnings call
US branded business witnessed sales of USD20m (down 10%QoQ) primarily
attributable to lower Suprax sales (seasonality factor). Gavis business was
marginally up sequentially, driven by ramp up in Methergine. Gavis’ generic
business was fairly stable QoQ
FY17 US sales should be driven by continued sales momentum of gFortamet,
gGlumetza where competition is expected to remain limited. Management does
not expect additional generic competition in the near term for gGlumetza
(currently a 2 player market, 2 additional generic companies have received
approval but not launched). With respect to gFortamet management indicated 1
additional competitor could enter the market in the near term (currently a 3
player market).
LPC expects 10 new launches in 2HFY17 and 30 new launches in the US in FY18E.
The key material launches in end FY17-FY18 are gMinastrin 24 Fe (FTF, Expected
Mar 2017), gTamiflu (FY18), gFosrenol (FY18), gPrevacid Solutab (FY18) and
gWellbutrin XL, gPaxil. Additionally dermatology and controlled substances
product launches over FY17-18 to also contribute towards overall US sales
growth.
Additionally management has guided for niche ANDA approvals of gWelchol,
gRenvela and gRenagel beginning 2HFY18. The company has received CRL’s
outstanding from the USFDA for these products, and intends to respond to the
queries raised in 2HFY17
Guidance for R&D as % of sales maintained at 12-15% in FY17 (~INR25b). LPC
reported a 47% Y-o-Y jump in R&D expenses in 2QFY17 to INR5.7b (13.3% of net
sales) compared to 11.6% of net sales in the 2QFY16 as specialty therapy focus
continues for its pipeline.
Lupin intends to file 30 ANDA’s in FY17 (6 ANDA’s filed in 1HFY17). The company
intends to file for Albuterol Sulfate (gProair HFA) inhaler in 3QFY17 (USD2b
market). Perrigo has already filed its ANDA.
Capital expenditure outlay of USD250-300m in FY17.
Lower FY17 tax rate guidance of 25%, owing to Ind-As accounting benefits
9 November 2016
4
 Motilal Oswal Financial Services
Lupin
Valuation and view
Lupin has consistently re-rated over the last five years following consistent earnings
performance, improvement in Balance Sheet health and return ratios.
Long term outlook remains firm
We believe long term growth outlook for Lupin remains firm and we expect the
company to sustain premium multiples (vs peers). Strong execution track record,
and high capital efficiency justify premium multiple.
We value Lupin at 22x 1HFY19E EPS, at par with large cap peers (1 year forward P/E)
which is justified noting:
Robust earnings growth despite sizeable base
High return ratios (FY16: RoE of 23%)
Key catalysts to drive stock performance over medium term are:
Potential M&A to expand reach in RoW markets (Eastern Europe, Latam).
Rebuilding of US branded business, with scale-up of new brands (Methergine)
and potential new acquisitions.
Niche US generic launches like gFosrenol, gWelchol, gMinastrin 24FE etc.
We believe that the following factors pose risks to our thesis:
Regulatory delays affecting key US launches.
Slower than expected ramp up of Gavis portfolio
Slower than expected turnaround of Japan business (I’rom acquisition), delaying
margin improvement.
Exhibit 9: Higher premium relative to Sensex
Min(x)
39.8
160
80
Lupin PE Relative to Sensex PE (%)
LPA (%)
Exhibit 8: P/E valuation band (10 years)
49.0
37.0
25.0
13.0
1.0
7.0
18.9
20.2
PE (x)
Peak(x)
Avg(x)
11.5
0
-80
18.8
Source: Company, MOSL
Source: Company, MOSL
9 November 2016
5
 Motilal Oswal Financial Services
Lupin
Operating metrics
Exhibit 10: Key operating metrics
1QFY15
Revenue Mix (%)
US
India
Japan
Europe
ROW
APIs
Revenue Growth (%)
US
India
Japan
Europe
ROW
APIs
As % of sales
Raw material
Staff cost
R&D cost
Other expenses
Tax Rate
Margins (%)
Gross Margins
EBITDA Margins
EBIT Margins
PAT margins
48.9
23.2
10.4
2.1
6.5
8.9
35.7
60.3
29.2
16.8
(29.3)
8.8
20.4
67.8
33.7
12.5
7.4
14.1
39.0
66.3
33.4
31.5
19.0
2QFY15
40.8
25.6
11.1
2.8
9.4
10.2
18.4
22.9
20.4
11.8
18.2
11.7
11.2
75.1
34.3
14.1
9.1
17.6
23.1
65.7
26.2
24.0
20.2
3QFY15
44.7
23.7
10.9
2.6
9.5
8.8
5.4
3.5
14.4
(8.0)
21.8
24.0
(7.2)
73.0
32.5
13.2
8.3
18.9
28.0
67.5
27.8
27.2
19.1
4QFY15
45.1
21.7
9.6
2.9
10.5
10.1
0.1
(6.3)
15.2
(8.5)
12.1
2.8
5.5
74.9
31.3
15.8
10.1
17.7
19.5
68.7
25.6
22.9
17.9
1QFY16
38.7
28.8
10.5
2.8
8.6
10.6
(6.4)
(25.8)
16.2
(5.4)
24.1
23.5
11.4
75.7
31.9
16.1
10.2
17.4
28.5
68.1
26.1
25.9
18.5
2QFY16
36.1
27.8
10.1
3.8
11.7
10.4
2.4
(9.3)
11.2
(6.5)
39.3
26.4
4.6
83.5
35.2
16.7
12.1
19.5
27.4
64.8
19.9
18.9
13.1
3QFY16
41.8
25.9
11.1
3.0
9.8
8.2
6.8
0.0
17.1
9.3
25.5
10.9
0.1
79.8
33.4
15.7
11.7
18.9
35.4
66.6
24.7
24.8
15.8
4QFY16
53.5
18.6
8.4
3.1
9.5
6.9
34.0
58.7
14.7
17.0
40.7
21.1
(7.7)
70.2
27.0
14.2
12.5
16.5
35.8
73.0
31.3
29.2
18.3
1QFY17
50.4
21.9
9.7
2.9
8.2
6.8
41.2
83.8
7.3
31.0
49.5
34.6
(8.9)
72.8
29.3
16.3
11.5
15.7
23.7
70.7
29.3
27.4
20.3
2QFY17
47.4
23.6
10.4
2.6
9.0
6.9
31.9
73.1
12.1
35.1
(8.6)
1.4
(12.3)
77.5
29.5
16.9
13.6
17.5
19.4
70.5
24.0
20.0
15.7
Source: Company; MOSL
9 November 2016
6
 Motilal Oswal Financial Services
Lupin
Story in charts
Exhibit 11: Revenue mix in FY16
9
42
US
Europe
India
Japan
24
3
RoW
APIs
5
49
9
60
9
85
9
100
11
114
12
12
Exhibit 12: Healthy revenue growth on expanded base
Formulations (INR b)
API (INR b)
12
13
10
10
125
159
188
213
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Exhibit 13: US business to be driven by strong
ANDA pipeline + Gavis acquisition
Generic sales (USD m)
Gavis sales (USD m)
150
83
837
FY15
46
858
FY16
92
240
103
Branded Sales (USD m)
300
113
Exhibit 14: Forecast sustained improvement in margins
EBITDA (INR b)
28.3
26.6
17.3
20.3
EBITDA margins (%)
26.4
25.9
26.8
27.5
961
FY17E
1,061
FY18E
1,173
14
FY12
23
FY13
30
FY14
36
FY15
38
FY16
45
55
64
FY17E
FY18E
FY19E
Exhibit 15: Expect strong EPS CAGR of 21% over FY16-19E
EPS (INR/ share)
Exhibit 16: Lower tax outflow to support PAT margins
PBT margin (%)
25
17
15
17
20
19
27
PAT margin (%)
24
22
23
24
12
14
16
16
16
17
17
19
18
29
39
53
50
62
77
89
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Exhibit 17: Industry leading return ratios
RoCE (%)
28.5
21.7
18.3
23.2
26.5
28.6
30.4
22.9
29.1
16.8
22.8
23.4
22.2
RoE (%)
Exhibit 18: Rich ANDA pipeline
ANDA filed
ANDA pending
343
192
210
15.3
16.4
16.4
127
86
148
100
FY11
173
176
109
FY12
98
FY13
93
FY14
99
FY15
163
FY16
FY12
FY13
FY14
FY15
FY16
FY17E FY18E FY19E
Source: Company, MOSL
FY10
Source: Company, MOSL
9 November 2016
7
 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
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
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
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
-5.5
16.0
2017E
174,574
22.9
45,215
25.9
8,322
36,893
1,210
2,300
37,982
0
37,982
9,496
25.0
375
27,746
22.2
15.9
2018E
205,627
17.8
55,108
26.8
8,268
46,839
1,182
2,400
48,058
0
48,058
12,976
27.0
375
34,707
25.1
16.9
(INR Million)
2019E
232,148
12.9
63,841
27.5
8,948
54,893
1,182
2,500
56,211
0
56,211
15,739
28.0
375
40,097
15.5
17.3
Consolidated Balance Sheet
Y/E March
Equity Share Capital
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
E: MOSL Estimates
(INR Million)
2014
897
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
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
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
2017E
901
132,310
133,211
696
1,239
53,739
17,454
71,193
206,338
99,945
33,535
66,409
5,156
2,055
46,832
123,938
30,331
45,696
34,650
13,259
38,052
28,517
9,535
85,886
206,338
2018E
901
162,272
163,173
1,071
1,239
53,739
17,454
71,193
236,676
111,968
40,150
71,817
2,828
2,055
46,832
156,343
35,486
53,825
52,962
14,070
43,200
33,363
9,837
113,143
236,675
2019E
901
197,625
198,526
1,446
1,239
53,739
17,454
71,193
272,403
122,827
47,308
75,518
1,664
2,055
46,832
193,827
39,791
60,767
78,306
14,962
47,493
37,411
10,082
146,334
272,403
9 November 2016
8
 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)
Cash P/E (Fully Diluted)
P/BV
EV/Sales
EV/EBITDA
Return Ratios (%)
RoE
RoCE
RoIC
Leverage Ratio
Current Ratio
Interest Cover Ratio
Debt/Equity (x)
2014
38.7
44.5
154.6
6.0
16.0
39.5
34.3
9.9
6.0
22.7
2015
53.5
63.1
197.4
7.5
16.9
28.6
24.2
7.7
5.4
18.9
2016
50.4
60.7
243.8
7.5
17.9
30.3
25.2
6.3
5.3
19.9
2017E
61.6
80.0
295.6
9.0
16.9
24.8
19.1
5.2
4.1
15.9
2018E
77.0
95.4
362.1
9.0
13.7
19.9
16.0
4.2
3.4
12.7
2019E
89.0
108.8
440.6
9.0
11.8
17.2
14.0
3.5
2.9
10.6
28.6
26.5
29.7
2.7
102.9
0.1
30.4
29.1
34.4
1.8
324.7
0.1
22.9
16.8
18.8
2.6
73.7
0.7
22.8
15.3
16.8
3.3
30.5
0.5
23.4
16.4
19.9
3.6
39.6
0.4
22.2
16.4
21.4
4.1
46.4
0.4
Cash Flow Statement
Y/E March
Oper. Profit before Tax
Interest/Dividends Recd.
Direct Taxes Paid
(Inc)/Dec in WC
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
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
-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
-71,217
-77,369
16,509
-54,708
2,459
66,483
-446
-4,071
64,425
3,565
4,814
8,379
2017E
45,215
2,300
-9,496
6,883
44,902
-10,696
34,206
-1,980
-12,676
0
0
-1,210
-4,745
-5,955
26,272
8,379
34,651
2018E
55,108
2,400
-12,976
-8,945
35,587
-11,349
24,238
0
-11,349
0
0
-1,182
-4,745
-5,926
18,312
34,650
52,962
2019E
63,841
2,500
-15,739
-7,847
42,754
-11,485
31,270
0
-11,485
0
0
-1,182
-4,745
-5,926
25,343
52,962
78,305
9 November 2016
9
 Motilal Oswal Financial Services
Lupin
Corporate profile
Company description
Exhibit 1: Sensex rebased
Lupin is amongst the larger pharma companies that
is actively targeting the regulated generics markets.
Historically very strong in the anti-TB segment, it
has over the years built up expertise in
fermentation-based products and segments like
cephalosporins, prils and statins. Lupin is now a fully
integrated
company,
with
manufacturing
capabilities in APIs and formulations and a direct
marketing presence in the target markets.
Source: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Sep-16
Promoter
DII
FII
Others
46.7
7.2
34.7
11.4
Jun-16
46.8
7.5
34.9
10.8
Sep-15
46.6
6.6
36.9
10.0
Source: Capitaline
Exhibit 3: Top holders
Holder Name
National Westminster Bank PLC
New Perspective Fund
Rakesh Jhunjhunwala
Government of Singapore
Abu Dhabi Investment Authority
% Holding
2.4
1.8
1.7
1.7
1.3
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Desh Bandhu Gupta
Kamal K Sharma
Nilesh Gupta
Vinita Gupta
M D Gupta
R V Satam
Designation
Chairman
Vice Chairman
Managing Director
Chief Executive Officer
Executive Director
Company Secretary
Exhibit 5: Directors
Name
Dileep C Choksi
R A Shah
Richard Zahn
Jean-Luc Belingard
Name
K U Mada
Ramesh Swaminathan
Vijay Kelkar
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Deloitte Haskins & Sells LLP
Ernst & Young LLP
S D Shenoy
Internal
Cost Auditor
Type
Statutory
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
MOSL
forecast
61.6
77.0
Consensus
forecast
65.7
77.1
Variation (%)
-6.3
-0.2
Source: Bloomberg
Source: Capitaline
9 November 2016
10
 Motilal Oswal Financial Services
Lupin
NOTES
9 November 2016
11
 Motilal Oswal Financial Services
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Lupin
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LUPIN
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No
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12