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Investing.com - BofA Securities has upgraded Lupin (NSE:LUPN) (NSE:LPC) from Underperform to Neutral while raising its price target to INR1,970.00 from INR1,930.00, citing a more favorable risk-reward profile following recent stock underperformance.
The upgrade comes after Lupin shares declined 21% against a 4% gain in the Nifty index, bringing the company’s valuation to 23 times FY27 price-to-earnings ratio, according to BofA Securities.
The research firm noted that Lupin’s strong first-half FY26 earnings were expected due to the gTolvaptan first-to-file launch, which helped the company achieve 26% margins in Q1 FY26 compared to 23% in FY25.
BofA Securities had previously been concerned about the likely gTolvaptan revenue cliff after its six-month exclusivity period and the company’s dependence on key U.S. approvals to support margins in the second half of FY26 and FY27.
The firm now believes Lupin’s U.S. pipeline, including recent approvals, improves confidence in second-half earnings, with the possibility of slower gTolvaptan erosion representing an upside risk, leading to a 1-2% adjustment in EBITDA estimates.
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