Mumbai: Following the strong performance by Lupin in third quarter of current fiscal (Q3FY10), Karvy Stock Broking has recommended buy rating on Pharma giant, with price target of Rs.1800. During the third quarter of current fiscal, the net profit of the company was Rs.1606 million, compared to the expectation of Rs.1520.2 million.
Revenues for Q3FY10 increased (+29.2 percent y-o-y) to Rs.12707.8 million higher than Karvy's expectation of Rs.11859.7 million primarily due to strong growth in sales in U.S. (+42.4 percent y-o-y), Japan (+12.8% y-o-y) and Europe (+61.4% y-o-y). Operating Profit Margin for Q3FY10 was recorded at 20.6 percent.
Seeing the strong performance, the brokerage firm revised FY 2010E and FY 2011E revenue numbers of the company by 5.3 percent to Rs.48.4 billion and by 6.2 percent to Rs.58.8 billion on back of greater traction in domestic formulations and Antara launch, coupled with 10 launches in U.S. markets including three launches in FY 11E. "We have also factored ramp up in revenues on higher base in Japanese markets. We continue to amortise goodwill on account of acquisitions to the tune of Rs.317 million for FY 2010E and FY 2011E. We upgrade our FY 2010E EPS by 9.4 percent to Rs.73 for FY 2010E and by 1.3 percent to Rs.93.4 for FY 2011E," stated Karvy. With the recommended target price, if the stock is bought at Thursday's closing price of Rs. 1,460, the percentage of gain would be 23 percent.
Revenues for Q3FY10 increased (+29.2 percent y-o-y) to Rs.12707.8 million higher than Karvy's expectation of Rs.11859.7 million primarily due to strong growth in sales in U.S. (+42.4 percent y-o-y), Japan (+12.8% y-o-y) and Europe (+61.4% y-o-y). Operating Profit Margin for Q3FY10 was recorded at 20.6 percent.
Seeing the strong performance, the brokerage firm revised FY 2010E and FY 2011E revenue numbers of the company by 5.3 percent to Rs.48.4 billion and by 6.2 percent to Rs.58.8 billion on back of greater traction in domestic formulations and Antara launch, coupled with 10 launches in U.S. markets including three launches in FY 11E. "We have also factored ramp up in revenues on higher base in Japanese markets. We continue to amortise goodwill on account of acquisitions to the tune of Rs.317 million for FY 2010E and FY 2011E. We upgrade our FY 2010E EPS by 9.4 percent to Rs.73 for FY 2010E and by 1.3 percent to Rs.93.4 for FY 2011E," stated Karvy. With the recommended target price, if the stock is bought at Thursday's closing price of Rs. 1,460, the percentage of gain would be 23 percent.
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