Lupin’s Q2-FY27 EBITDA fell 8 per cent to ₹1,960 crore, matching analyst estimates. While revenues grew 14 per cent to ₹7,780 crore, competition in key products like gTolvaptan remains a concern. The company maintains an "Accumulate" rating with a target price of ₹2,250 as it focuses on its niche pipeline.
Lupin's Q2-FY27 EBITDA stood at ₹1,960 crore (down 8 per cent year on year) in line with our estimates.
Currently, three products (gTolvaptan, gMirabegron and gSpiriva) contribute about 50 per cent to total EPS. Competition in gTolvaptan has increased, whereas competition is likely to intensify in gMirabegron Q3FY27 onwards.
Though Lupin has some niche pipeline including 505 (b) (2) opportunity and biosimilars to compensate, we expect Lupin PAT to decline over FY26-28E. Our FY28E and FY29E EPS stands cut by 2-5 per cent. We maintain our "Accumulate" rating with TP of ₹2,250 (23x September 2028E EPS).
Revenues grew 14 per cent year on year to ₹7,780 crore, vs our estimate ₹7,600 crore. Beat was on account of higher-than-expected US sales which stood at $319 million, we estimated $290 million. Sequential decline was largely due to competition in certain key products. India formulation grew 15 per cent.
EMs increased sharply by 46 per cent, whereas other developed markets were down 3 per cent. API business was up 20 per cent.
The company reported EBIDTA of ₹1,950 crore, down 8 per cent.
GMs stood at 74.3 per cent. R&D expenses increased 21 per cent; 7.9 per cent of sales at ₹610 crore. Ex R&D other expenses were up 24 per cent. Staff cost was up 29 per cent.
The company booked forex gain of ₹87 crore. Other operating income at ₹41.7 crore. Adjusted for forex PAT was in line with our estimate.