Lupin, a leading pharmaceutical company, witnessed a sharp decline in its share price, dropping more than 6% during morning trades on Tuesday, subsequent to the release of its Q4 earnings performance reported on Monday post-market hours. The shares of Lupin dipped by 6.11%, reaching an intra-day low of Rs 1,581.10 per share on the NSE.
Lupin Ltd reported a net profit of Rs 359.4 Crore for the quarter ending March, marking a sequential decline of 41.4% from ₹613 crore in the December 2023 quarter. However, on a year-on-year basis, the net profit surged by 52.3% compared to Rs 236 crore in the corresponding quarter of the previous year.
Despite the decline in quarterly profits, Lupin’s domestic sales for Q4 stood at Rs 1,601.5 crore, representing a 7.2% decrease compared to Rs 1,725.1 Crore in Q3 FY2024. Nonetheless, they recorded an 8.3% year-on-year increase compared to Rs 1,478.6 crore in Q4 FY2023, constituting one-third of Lupin’s global sales.
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The significant impact on net profit on a sequential basis was attributed to an impairment of Rs 149 crore related to intangible assets incurred by Lupin.
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Despite the setback in quarterly earnings, Lupin’s overall performance for the financial year demonstrated a noteworthy improvement. For the twelve months ended March 2024, Lupin reported a net profit of Rs 1,935.6 crore, marking a remarkable growth of 332% compared to Rs 447.7 Crore in FY23.
Brokerages On Lupin
Kotak Securities on Lupin
According to a report by Kotak Securities, the firm has reiterated its sell rating on Lupin, setting a target price of Rs 1,375 per share.
The report attributes this recommendation to marginal operational shortcomings, driven by lower branded sales and increased Research and Development (R&D) expenditures. Although marginally lower sales were reported.
The company maintained healthy gross margins at 68.3%. Furthermore, Kotak Securities says Lupin’s US sales in Q4 amounted to $209 million, marking a decline of 1.5% quarter-on-quarter.
JP Morgan on Lupin
In a recent report, JP Morgan has reiterated its neutral stance on Lupin, one of India’s leading pharmaceutical companies, while setting a target price of Rs 1,550. The report analyzes Lupin’s performance in the fourth quarter, highlighting several key points.
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According to JP Morgan, Lupin’s fourth-quarter results were broadly in line with expectations, with margins surpassing forecasts. The report identifies margin improvement as a significant positive, alongside continued strength in the Europe, Middle East, and Africa (EMEA) markets, as well as a reduction in net debt.
However, the report also notes a downside, pointing out lower growth in Lupin’s India business. Despite this, JP Morgan maintains a neutral outlook on Lupin, emphasizing the company’s overall performance and potential in the pharmaceutical sector.
(Disclaimer: Views, recommendations, opinion expressed are personal and do not reflect the official position or policy of Financial Express Online. Readers are advised to consult qualified financial advisors before making any investment decisions. Reproducing this content without permission is prohibited.)
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