Nucor earnings beat by $0.08, revenue fell short of estimates
On Friday, JPMorgan analyst Bansi Desai adjusted the price target for Lupin (NSE:LUPN) (LPC:IN) to INR 2,450.00, a decrease from the previous INR 2,560.00, while reaffirming an Overweight rating on the stock. The revision follows Lupin’s fourth-quarter earnings report, which revealed revenues that met expectations and an EBITDA margin approximately 0.8% higher than JPMorgan’s estimate (JPMe). This outperformance was attributed to a stronger gross margin, which was 0.4% above JPMe, and well-managed expenditures.
Lupin’s stock has seen a notable performance over the past year, surpassing the Nifty Pharma index by around 12%. JPMorgan’s continued Overweight rating on Lupin is based on several factors, including the company’s robust U.S. pipeline featuring a variety of complex generics such as inhalation products, injectables, and biosimilars. Lupin aims to expand its complex generics segment from the current 31% to 49% by the fiscal year 2030.
The company’s Indian operations are also expected to contribute to growth, with projections of double-digit increases. This optimism is driven by Lupin’s strong performance in key therapies, the addition of medical representatives, new product launches, and expansion in adjacent businesses. Additionally, there is potential for margin improvement as these adjacent businesses gain momentum and approach profitability.
Despite potential challenges from U.S. tariffs, which could affect Lupin given its significant revenue exposure (estimated at 35% for FY27E), the company’s manufacturing facilities in the United States could help mitigate some of the impact. Lupin’s valuation currently stands at approximately 25 times core FY26E/27E EPS, which represents a discount of about 15% and 5% compared to its peers Dr. Reddy’s and Zydus, respectively.
In light of the revised projections, JPMorgan has adjusted its FY26E/27E earnings estimates for Lupin, reducing them by 4% for FY26 and increasing them by 2% for FY27. The changes reflect expectations of lower U.S. revenues for FY26 and marginally higher margins for FY27, leading to the revised price target of INR 2,450.00.
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