1 September 2015
Update | Sector: Healthcare
Lupin
BSE Sensex
25,696
S&P CNX
7,786
CMP: INR1,863
TP: INR2,280 (+22%)
Buy
Why Lupin is our top large-cap pick
Differentiated US launches and Gavis the key growth drivers
Stock Info
Bloomberg
Equity Shares (m)
M.Cap. (INR b)/(USD b)
52-Week Range (INR)
1, 6, 12 Rel.Per (%)
LPC IN
447.5
833.7/12.6
2,112/1,280
18/17/49
Avg Val (INRm)/Vol ‘000 1,954/1,141
Free float (%)
53.4
Financial Snapshot (INR b)
Y/E Mar
2015 2016E 2017E
Sales
EBITDA
Adj. PAT
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
Div. Yield (%)
34.8
9.4
0.4
33.7
7.6
22.8
0.4
24.9
6.0
17.1
0.5
123.9 144.0 178.6
32.4
24.0
38.1
30.4
40.6
15.3
38.1
24.9
55.3
3.4
25.1
29.2
16.8
49.9
33.6
74.8
35.2
27.0
28.2
13.9
With a recent acquisition of Gavis, Lupin (LPC) is set to become a formidable
player in the generics market (~USD 1.6b sales by FY18). The domestic business
growth is likely to outpace market growth, led by a thrust in chronic therapies;
besides, first-mover advantage in Japan generics (12% of sales) would create
long-term value for the company. We estimate 21% EPS CAGR over FY15-18, led
by 20% revenue growth and cumulative margin expansion of 230bp. Gavis
acquisition is likely to become EPS accretive from FY16 itself. LPC is also expected
to generate INR55b free cash flows over FY17-18, thereby becoming net cash
company by FY18. We reiterate
Buy
with a target price of INR2,280 (27x Sep’17E
EPS), implying a 22% upside.
US generics hold key to revenue performance:
US generics would be the key
growth contributors for LPC over FY15-18. We expect US generics to post 22%
CAGR over the next three years, driven by 25-30 new product launches annually.
Healthy pace of new launches and entry in newer therapies (derma, ophthal)
would also help sustain outperformance in the domestic business (18-19%
CAGR). Japan business growth is likely to recover on the back of restructuring
and stable currency, resulting in 12% annual growth. RoW sales is expected to
witness 26% CAGR over FY15-18, led by smaller acquisitions across geographies
(Mexico, Brazil and Russia) and healthy growth in existing markets.
Niche launches and Gavis acquisition to strengthen US business:
Post Gavis
acquisition, LPC will extend its product offerings in topical, control substances
and gastro intestinal products along with existing product pipeline of ophthal,
oral contraceptives, complex injectable and respiratory. With a strong pipeline of
164 products (Gavis + LPC), US business sales is expected to reach ~USD 1.6b by
FY18 and extend its segment share to 48% of sales from 45% in FY15.
Structural margin improvement to continue:
We expect LPC EPS to witness 21%
CAGR over FY15-18, boosted by 230bp EBITDA margin expansion (to 28.4% in
FY18) due to (a) acquisition of profitable Gavis business (36-38% EBITDA
margins), (b) niche generic launches in the US, (c) completion of I’rom
restructuring and sourcing from India to boost profitability in Japan, and (d)
rebound in branded business growth to aid field force productivity in the US.
Free cash flow generation of ~USD1b over FY17-18:
Even though ROE/ROCE
ratios are expected to decline in FY16E due to Gavis acquisition, we expect a
slight recovery in ROE in FY18 (from 25% to 27%)—led by improved profitability
and asset utilization. LPC is also likely to generate ~USD1b free cash flows over
FY17-18, leading to net cash balance sheet by FY18.
Premium multiples sustainable:
LPC trades at 34x FY16E, 26x FY17E and 20x
FY18E P/E, above its historical multiples. We expect the company to sustain 30%
premium to the sector average multiple due to strong execution track record,
margin expansion, potential earning upgrades and capability to generate strong
free cash flows over the next three years. Reiterate
BUY.
Adj. EPS (INR) 53.5
197.4 243.9 308.9
EV/EBITDA (x) 25.7
Amey Chalke
(Amey.Chalke@MotilalOswal.com);+91 22 3982 5423
Investors are advised to refer through disclosures made at the end of the Research Report.
Motilal Oswal research is available on
www.motilaloswal.com/Institutional-Equities,
Bloomberg, Thomson Reuters, Factset and S&P Capital.

Lupin
Gavis likely to drive 22% CAGR growth in the US
Gavis acquisition has placed Lupin among the top 6 generic companies in the US,
with more than 160 pending ANDAs (Gavis + LPC). The acquisition will not only
strengthen LPC’s Derma pipeline (20+ pending filings), but also facilitate its entry
into the lucrative control substance market.
Exhibit 1: Sixth largest ANDA pipeline post Gavis acquisition
270
230
183
165
165
164
159
120
120
98
87
70
68
66
Source: Company, MOSL
With Gavis, LPC to gain a foothold in US Derma market
Generic derma was not an attractive market until FY10 due to its small size,
costly filings (USD1m-2m/product) and long gestation period (3+ years—
development and filings).
In US, topical products involve higher levels of bioequivalence assessed through
1) in vivo pharmacodynamic (pD) studies 2) limited clinical studies, or 3) in vitro
studies. As a result, very few generic companies make an effort to enter this
market. Due to low competition and withdrawal of a few players, companies
such as Taro hiked the prices of their key products steeply, resulting in superior
profitability for the company. We expect the Derma market to remain
concentrated for few more years due to lack of newer players and filing
difficulties.
Exhibit 3: Top 6 players cover 70% of the generic market
Exhibit 2: Derma market has grown at a 13% CAGR (08-14)
Generic Derma market (USD b)
31
13
2
(8)
2.3
2008
2.6
2009
3.4
2010
4.5
2011
4.6
2012
4.7
2013
4.9
2014
2
4
32
Growth (%YoY)
18%
33%
16%
5%
6%
7%
15%
Taro
Perrigo
Sandoz
Mylan
Actavis
Akorn
Others
Source: IMS, MOSL
Source: IMS, MOSL
1 September 2015
2

Lupin
Gavis acquisition saved three years of Lupin
Before Gavis acquisition, LPC’s hardly had any presence in the US Derma market
and would have taken 3-4 years to scale up on its own; on the other hand, new
entrants like Glenmark and Tolmar already had 18-20 products in the market.
Delayed entry into these derma products could have been lost opportunity for
the company; post the Gavis acquisition, LPC has cut down this gestation period
and now has a strong portfolio of 25+ Derma products, which could be launched
over the next 2-3 years.
Exhibit 4: Derma approvals concentrated among few players
92
60
45
33
27
19
18
16
12
9
Source: Company, MOSL
LPC to enter the lucrative CS market
In the US, the generic controlled substance market is valued at ~USD4.5b and
covers 50% of the total market. It is currently growing at a healthy 7-9%
annually.
Highly concentrated market:
Due to government quotas, stringent regulatory
rules and benefits of vertical integration, the market is highly concentrated and
the top 7 generic companies occupy 73% of the generic market. There are ~20
companies having sales over USD40m annually in the CS segment.
Gavis has 20+ controlled product filings and already has an USFDA-approved
facility in the US, which will provide access to other government channels where
LPC can supply other therapy products as well.
Exhibit 5: 50% of controlled substance market is generic and growing at 7-9% CAGR
Generic market
Branded Generic market
Innovator's market
37%
50%
13%
Source: Company, MOSL
1 September 2015
3

Lupin
Addition of Gavis portfolio will strengthen LPC’s position among Indian
peers
Exhibit 6: Specialty & Complex Gx Areas – Snapshot (Excluding Gavis)
Source: Company, MOSL
Exhibit 7: Specialty & Complex Gx Areas – Timelines (Excluding- Gavis)
Source: Company, MOSL
1 September 2015
4

Lupin
Exhibit 8: Gearing up for complex generic opportunities (Post Gavis acquisition)
Generic
market
(USD b)
Patented
Market SUNP+RBXY
(USD b)
DRRD
GNP
LPC
Cipla
CDH
ARBP
Niche / Complex Generics
Dermatology
Transdermals
Ophthalmology
Oral Contraceptive
Respiratory / Inhalers
Nasal Spray s
Controlled Substance
Injectables
Modified Release
Biosimilar
Marketed
4
1
1
2
2
1
3
8
6
0
In Pipeline
6
4
5
2
11
2
5
10
17
40
Source: MOSL, Company, IMS Health
Lupin’s internal sales projections for Gavis
LPC expects Gavis sales to grow 3x by FY18, driven by 50+ product approvals
over the next three years.
Exhibit 9: LPC’s expectations from the Gavis business
Sales (USD m)
Total approvals
350
250
140
96
34
FY15
FY16
49
83
87
128
365
FY17
FY18
FY19
Source: Company, MOSL
If LPC is able to close the Gavis acquisition in 3Q, we expect Gavis to contribute
USD60m sales in FY16 (USD120m annual sales); with close to 50 product
launches over next the three years, we expect Gavis sales contribution to reach
USD280m in FY18 (80% of LPC’s own projections).
Exhibit 11: Gavis ANDA filings till date
ANDA filed
ANDA approved
39
280
200
23
25
Exhibit 10: Gavis sales and niche products to drive US sales
Branded sales
Generic sales
Gavis business
60
547
145
FY13
712
87
FY14
837
83
FY15
887
41
FY16
1,065
50
FY17
1,278
60
FY18
7
0
3 2
6 4
10
3
11
3
18
3
20
1
3
2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: IMS, MOSL
5
Source: IMS, MOSL
1 September 2015

Lupin
We expect LPC to launch 25-30 products annually (including 15-20 Gavis
products), resulting in 22% CAGR over FY15-18. LPC is likely to cross USD 1.6b in
US sales by FY18, increasing the overall segment share from 45% in FY15 to 48%
in FY18.
Key launches over the next three year include Nexium, Welchol, Renvela,
Renagel, Glumetza (FTF), Prezista, Tykerb and Truvada.
Exhibit 12: LPC’s own generic pipeline:
Brand
Asacol
Renagel
Renvela
Nexium
Welchol
OrthoTricyclen Lo
Prezista
Coreg CR
Nuvigil
Seroquel XR
Viread
Truvada
Lyrica
Ranexa
Minastrin 24 Fe
Toviaz
Exhibit 13: Break-up of ANDA filings (164)
3%
Oral Solids
Derma
Controlled substance
62%
Oral contraceptives
Ophthal
13%
5%
8%
Brand Sales
500
377
330
2,397
300
450
400
300
200
1,200
500
2,000
2,200
160
184
150
Timeline
4QFY16
4QFY16
4QFY16
4QFY16
4QFY16
4QFY16
FY17
FY17
FY17
FY18
FY18
FY18
FY19
FY20
FY20
FY20
Exhibit 14: Break-up of products under development (251)
2%
4%
Orals
Derma
Injectables
48%
Controlled substances
Ophthal
Nasal
20%
MDIs
11%
11%
13%
Source: IMS, MOSL
Source: IMS, MOSL
Exhibit 15: Gavis business to boost FY18 EPS by ~9% (INR/sh)
LPC
Gavis
8
86
53
FY15 - EPS
FY18 - EPS
Source: IMS, MOSL
1 September 2015
6

Lupin
Domestic business to witness 18-19% CAGR over FY15-18
From being the largest supplier of anti-TB products in India to becoming one of
the fastest growing companies in chronic therapies (like CVS, anti-Diabetes,
respiratory and CNS), LPC has come a long way. Currently it ranks 8th in Indian
pharma market, with annual secondary sales of IN 296b in according to July
AIOCD data.
LPC continues to be ranked first in TB products (53% market share) and third in
CVS and respiratory therapies. We project 18-19% CAGR growth in the Domestic
business over FY15-18, led by a thrust in high-growth chronic therapies.
Exhibit 17: Therapy mix (FY15)
13%
19%
19%
19%
4%
4%
8%
CVS
Anti TB
Anti Asthma
Anti Biotics
Anti Diabetic
Gastro Intestinal
CNS
Gynecology
Others
Source: IMS, MOSL
Exhibit 16: Robust growth over the next three years
Domestic formulation (INR b)
24%
18%
17%
20%
20%
Growth YoY
22%
8%
11%
14%
5%
14
FY10
16
FY11
19
FY12
24
25
30
35
42
49
16%
FY13 FY14E FY15 FY16E FY17E FY18E
Source: IMS, MOSL
RoW growth would be driven by both organic and inorganic
LPC has acquired multiple assets across geographies over last 10 years. Apart from
South Africa and Japan, most other markets for the company are still small and
fledgling. We expect RoW sales to witness 26% CAGR over FY15-18, led by recent
acquisitions (Mexico, Brazil, Russia) and healthy growth in key markets like South
Africa and Philippines.
Exhibit 18: Significant increase in acquisitions over last one year (Primarily in Emerging markets)
Year
FY08
FY09
FY09
FY09
FY09
FY12
FY14
FY15
FY15
FY15
FY16
FY16
FY16
FY16
Target
Kyowa
Multicare Pharma
Pharma Dynamics
Hormosan Pharma
Gereric Health
I'rom
Nanomi B.V
Grin Labs
Pharma Dynamics
Yoshindo JV
Medquímica
Biocom
Gavis
Temmler
Geography
Japan
Philippines
South Africa
Germany
Australia
Japan
Netherland
Mexico
South Africa
Japan
Brazil
Russia
US
Germany
Deal (USD m)
55
6
18
7
7
73
14
100
100
0.5
140
65
880
40
Specialization
Generics
Branded generics/OTC
Branded generics (60% stake)
Sales and marketing company
Generics/OTC
Specialty injectables
Complex injectables
Ophthalmics
Branded generics (40% stake)
Biosimilars
Branded generics/OTC
Branded generics
Generics (Derma & others)
Branded Generics
Annual sales
(USD m)
96
6
18
7
N/A
70
N/A
28
69
N/A
31
13
96
10
EV/Sales
0.6
1
2
1
N/A
1.0
N/A
3.6
3.7
N/A
4.5
5.0
9.2
4.0
Source: Company, MOSL
1 September 2015
7

Lupin
Valuation and view
Lupin has consistently re-rated over the last five years following consistent
earnings performance, and improvement in balance sheet health and return
ratios. We believe that it is likely to remain at the higher end of its P/E band as we
remain convinced on its execution ability, driving further earnings upgrades.
We value Lupin at 27x Sep’17E EPS—at par with SUNP (one-year forward P/E) and at
a 10% premium to other large-cap peers, which is justified due to:
Superior earnings growth of 31% (v/s 22% for large-cap peers).
Sector-leading return ratios (FY15: RoE of 25%, RoCE of 30%).
Strong free cash flow generation (~USD1b over FY17-18).
Key catalysts to drive stock performance over medium term:
M&As to expand reach in RoW markets (emerging markets, Europe).
Rebuilding of US branded business, with scale-up of new brands Alinia and
Locoid as well as product extensions for Suprax (life cycle management).
Higher-than-expected synergy from Gavis acquisition (supplies to government
channels, etc.).
Niche US generic launches like gWelchol, gNexium and gGlumetza in the next 4-
6 quarters.
We believe that the following factors pose risk to our thesis:
Regulatory delays affecting key US launches.
Slower-than-expected turnaround of the Japan business (I’rom acquisition),
delaying margin improvement.
Exhibit 19: One year for PE
49.0
37.0
25.0
13.0
1.0
0
17.6
7.0
-80
PE (x)
Peak(x)
Avg(x)
37.3
31.7
80
8.9
Min(x)
Exhibit 20: Lupin PE Relative to Sensex PE (%)
160
Lupin PE Relative to Sensex PE (%)
LPA (%)
99.1
Source: Company, MOSL
Source: Company, MOSL
1 September 2015
8

Lupin
Story in charts
Exhibit 21: Segment-wise mix (%)
India
USA
Europe
Japan
RoW
API
Total
*CAGR
FY14
22
44
3
12
9
10
100
FY15
24
45
3
11
9
9
100
FY16E
24
44
3
9
10
9
100
FY17E FY18E FY15-18E*
23
23
19
46
48
22
3
3
21
9
8
9
11
11
26
8
8
10
100
100
20
Source: Company, MOSL
Exhibit 22: Segment-wise growth (%)
India
USA
Europe
Japan
RoW
API
Total
FY13
24
55
19
52
36
0
36
FY14
5
30
25
-1
21
17
17
FY15
20
16
12
2
11
7
14
FY16E
FY17E
FY18E
19
19
19
11
32
23
29
16
17
3
11
12
32
31
16
11
9
10
14
24
20
Source: Company, MOSL
Exhibit 23: Formulations lead sales growth (INR b)
Formulations (INR b)
API (INR b)
16
15
13
9
5
40
FY10
9
49
FY11
9
60
FY12
85
FY13
100
FY14
114
131
164
197
11
12
Exhibit 24: Sales break-up (INR b)
23 %
52 %
4%
21 %
213
126
FY15 FY16E FY17E FY18E
Source: Company, MOSL
FY15
Domestic
USA
Japan
Row &
Others
FY18E
Source: Company, MOSL
Exhibit 25: EBITDA margin improves with product mix
Gross Margin (%)
59.6
61.5
63.2
63.2
66.2
EBITDA Margin (%)
67.4
68.0
68.0
68.0
Exhibit 26: EBITDA growth to sustain at 20%+ levels
EBITDA (INR m)
69
EBITDA growth (%)
37
24.2
26.1
26.5
27.9
28.4
9
14
10
17
12
20
33
22
27
32
18
38
31
21
50
60
18.6
17.8
17.3
21.3
FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E
Source: Company, MOSL
FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E
Source: Company, MOSL
Exhibit 27: Strong earnings growth expected ahead
Core EPS (INR/ share)
0
Exhibit 28: Break-up of EPS growth (FY15-18E)
One-off
94 %
20 %
-14 %
1
0
2
0
17
19
18
29
39
53
0
5
94.3
49
55
75
94
EPS (FY15)
Sales Gr.
Margin Imp.
FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E
Source: Company, MOSL
1 September 2015
Financial
Lev.
EPS (FY18E)
Source: Company, MOSL
9

Lupin
Exhibit 29: US business - driven by strong ANDA pipeline
Generic sales (USD m)
Branded Sales (USD m)
50
87
145
133
143
90
367
FY12
547
FY13
712
FY14
837
FY15
887
1,065
1,278
58
FY09
86
FY10
100
FY11
109
FY12
98
FY13
93
FY14
164
FY15
127
83
41
148
173
176
192
60
Exhibit 30: ANDAs filed v/s pending
ANDA filed
ANDA pending
296
310
FY11
FY16E FY17E FY18E
Source: Company, MOSL
Source: Company, MOSL
Exhibit 31: R&D cost to remain high as % of sales
R&D expense (INR b)
8.6
8.5
8.9
9.2
% of sales
9.4
9.7
Exhibit 32: Increasing productivity in India business
No of MRs
Field force productivity (INR m/MR)
5.4
3.9
3.7
3.7
3.9
4.5
4.6
7.7
7.6
4.8
FY11
5.2
FY12
7.1
FY13
9.3
FY14
11.0
FY15
13.2
16.8
20.5
2,944
FY09
3,682
FY10
4,238
FY11
4,900
FY12
5,200
FY13
5,365
FY14
5,500
FY15
FY16E FY17E FY18E
Source: Company, MOSL
Source: Company, MOSL
Exhibit 33: Return ratios to stay at 30% levels
RoCE (%)
40.1
33.3
25.3
29.6
21.7
24.6
28.5
28.6
30.4
40.6
29.2
25.1
28.2
27.0
29.0
26.9
RoE (%)
Exhibit 34: Cash cycle increases with lower creditor days
Inventory Days
Creditor Days
250
200
150
100
50
0
FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E
Source: Company, MOSL
64
76
77
75
88
70
84
95
95
Debtor Days
Cash conv. cycle days
FY11
FY12
FY13
FY14
FY15
FY16E FY17E FY18E
Source: Company, MOSL
Exhibit 35: Free cash flows improved over last 2 years
Free cashflow (INR b)
0.5
0.4
0.4
0.2
3
0
-2
0.1
7
10
0.1
4
-27
27
32
0.4
D/E
0.4
0.3
Exhibit 36: Fixed asset turnover to increase going ahead
Gross Block (INR b)
2.7
Fixed Asset turnover
2.8
2.4
2.2
2.5
2.5
2.2
2.1
2.5
21
FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E
Source: Company, MOSL
23
33
38
41
45
65
75
85
FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E
Source: Company, MOSL
1 September 2015
10

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 (%)
2011
56,478
18.3
10,068
17.8
1,712
8,356
345
1,934
9,944
0
9,944
1,149
11.6
148
8,646
8,646
25.6
15.3
2012
68,204
20.8
11,821
17.3
2,275
9,546
355
2,768
11,960
0
11,960
3,086
25.8
196
8,678
7,917
-8.4
11.6
2013
93,694
37.4
19,981
21.3
3,322
16,659
410
2,997
19,246
0
19,246
5,842
30.4
263
13,142
13,142
66.0
14.0
2014
109,343
16.7
26,505
24.2
2,610
23,895
267
3,688
27,317
-1,000
28,317
9,622
34.0
331
18,364
17,364
32.1
15.9
2015
123,890
13.3
32,386
26.1
4,347
28,039
98
6,208
34,148
0
34,148
9,704
28.4
412
24,032
24,032
38.4
19.4
2016E
144,020
16.2
38,139
26.5
5,877
32,261
937
4,496
35,821
0
35,821
10,388
29.0
350
25,083
24,858
3.4
17.3
2017E
178,592
24.0
49,853
27.9
6,342
43,511
1,299
6,161
48,373
0
48,373
14,028
29.0
375
33,970
33,604
35.2
18.8
(INR Million)
2018E
212,583
19.0
60,461
28.4
6,856
53,605
1,378
8,001
60,228
0
60,228
17,466
29.0
375
42,387
42,387
26.1
19.9
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)
2011
892
31,919
32,811
515
1,412
3,552
7,911
11,463
46,200
25,835
9,075
16,760
4,904
32
3,810
35,359
12,000
12,556
4,202
6,601
14,663
11,941
2,723
20,696
46,200
2012
893
39,236
40,129
723
1,442
5,087
10,470
15,557
57,852
36,274
14,422
21,852
4,437
28
5,644
47,393
17,327
17,800
4,025
8,241
21,503
17,565
3,939
25,889
57,851
2013
895
51,147
52,042
595
1,632
2,972
7,268
10,240
64,509
41,138
16,840
24,298
3,107
21
5,704
55,305
19,489
21,870
4,349
9,597
23,926
19,241
4,684
31,379
64,509
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
2016E
899
108,717
109,616
591
1,182
45,118
3,692
48,810
160,199
69,610
29,206
40,403
3,130
2,025
52,326
91,901
27,453
38,387
17,148
8,913
29,586
23,464
6,122
62,315
160,199
2017E
899
137,954
138,853
966
1,182
51,418
3,692
55,110
196,111
79,120
35,549
43,571
1,815
2,025
52,326
135,434
34,088
47,664
44,393
9,289
39,060
32,048
7,012
96,373
196,111
2018E
899
175,608
176,507
1,341
1,182
51,418
3,692
55,110
234,139
89,472
42,404
47,068
1,157
2,025
52,326
176,949
40,451
56,562
70,234
9,703
45,387
38,031
7,356
131,563
234,139
1 September 2015
11

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 (%)
EBITDA Margins (%)
Net Profit Margins (%)
RoE
RoCE
Leverage Ratio
Current Ratio
Interest Cover Ratio
Debt/Equity (x)
2011
19.4
23.2
73.5
3.0
18.2
96.1
80.3
25.3
14.9
83.5
17.8
15.3
29.6
25.3
2012
17.7
22.8
89.9
3.4
20.5
105.1
81.6
20.7
12.4
71.5
17.3
11.6
21.7
24.6
2013
29.4
36.8
116.3
4.0
15.9
63.4
50.6
16.0
9.0
42.0
21.3
14.0
28.5
33.3
2014
38.7
44.5
154.6
6.0
16.0
48.1
41.8
12.1
7.6
31.4
24.2
15.9
28.6
40.1
2015
53.5
63.1
197.4
7.0
15.3
34.8
29.5
9.4
6.7
25.7
26.1
19.4
30.4
40.6
2016E
55.3
68.4
243.9
8.0
16.8
33.7
27.2
7.6
6.0
22.7
26.5
17.3
25.1
29.2
2017E
74.8
88.9
308.9
9.0
13.9
24.9
21.0
6.0
4.7
16.9
27.9
18.8
27.0
28.2
2018E
94.3
109.5
392.7
9.0
11.2
19.8
17.0
4.7
3.9
13.5
28.4
19.9
26.9
29.0
2.4
24.2
0.4
2.2
26.9
0.4
2.3
40.6
0.2
2.7
89.7
0.1
1.8
285.8
0.1
3.1
34.4
0.4
3.5
33.5
0.4
3.9
38.9
0.3
Cash Flow Statement
Y/E March
Oper. Profit before Tax
Interest/Dividends Recd.
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
(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
2011
10,068
1,934
-1,173
-2,647
8,181
-4,545
3,636
233
-4,312
174
64
-345
-1,575
-1,682
2,187
2,015
4,202
2012
11,821
2,768
-3,055
-5,370
6,164
-8,736
-2,572
4
-8,733
430
4,094
-355
-1,777
2,392
-177
4,202
4,025
2013
19,981
2,997
-5,652
-5,166
12,160
-4,497
7,663
7
-4,490
475
-5,317
-410
-2,095
-7,348
323
4,025
4,348
2014
26,505
3,688
-9,475
-4,368
16,349
-6,098
10,251
-1,764
-7,862
1,593
-4,248
-267
-2,939
-5,861
3,626
4,349
7,975
2015
32,386
6,208
-10,300
7,364
35,657
-17,191
18,466
-14,799
-31,991
-1,766
-1,282
-98
-3,681
-6,828
-3,161
7,975
4,814
2016E
38,139
4,496
-10,388
-21,132
11,114
-52,295
-41,181
14,559
-37,736
0
44,100
-937
-4,207
38,956
12,334
4,814
17,148
2017E
49,853
6,161
-14,028
-6,814
35,172
-8,195
26,977
0
-8,195
0
6,300
-1,299
-4,733
268
27,244
17,148
44,393
2018E
60,461
8,001
-17,466
-9,348
41,647
-9,695
31,952
0
-9,695
0
0
-1,378
-4,733
-6,111
25,841
44,393
70,234
1 September 2015
12

Lupin
Corporate profile: Lupin
Company description
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.
Exhibit 35: Stock Vs Index rebased
Exhibit 38: Shareholding pattern (%)
Jun-15
Promoter
DII
FII
Others
46.6
6.8
36.8
9.8
Mar-15
46.6
8.7
34.7
10.0
Jun-14
46.7
11.0
31.7
10.6
Exhibit 39: Top holders
Holder Name
Genesis Indian Investment Co Ltd
National Westminister Bank Plc
Jhunjhunwala Rakesh Radheshyam
Government of Singapore
Aberdeen Global Indian Equity (Mauritius) Ltd
% Holding
2.7
1.6
1.5
1.3
1.0
Note: FII Includes depository receipts
Exhibit 40:
Top management
Name
Dr. Desh Bandhu Gupta
Dr. Kamal K Sharma
Mr. Nilesh Gupta
Ms. Vinita Gupta
Ms. M D Gupta
Designation
Chairman
Vice Chairman
Managing Director
CEO, Lupin Limited
Executive Director
Exhibit 41: Board of director
Name
Desh Bandhu Gupta
Kamal K Sharma
Nilesh Gupta
Vinita Gupta
R A Shah*
*Independent Director
Name
K U Mada*
Vijay Kelkar*
Richard Zahn*
Dileep C Choksi*
M D Gupta
Exhibit 42: Auditors
Name
Deloitte Haskins & Sells LLP
Ernst & Young LLP
S D Shenoy
Type
Statutory
Internal
Cost Auditor
Exhibit 43: MOSL forecast v/s consensus
EPS
(INR)
FY16
FY17
MOSL
forecast
55.3
74.8
Consensus
forecast
56.7
73.8
Variation
(%)
-2.5
1.4
1 September 2015
13

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