Buy Lupin for target of Rs 1760: ShareKhan

Cluster: Apple Green
Recommendation: Buy
Price target: Rs1,760
Current market price: Rs1,582

Price target revised to Rs1,760

•Lupin has received the US Food and Drug Administration?s approval for the blockbuster hypertension drug Lotrel’s generic version Amlodipine Benazepril capsules. The market size for the drug is $1.1 billion as per the IMS Health data and the patent for the drug expires in December 2017.
•Lupin is well placed in the direct-to-market generic segment in the USA with a healthy pipeline of 63 abbreviated new drug applications pending approval, including a number of Para IV opportunities. The FY2011 product opportunities will be driven primarily by Antara, Allernaze and Lotrel. We believe growth beyond FY2011 will be driven by the launches from an impressive portfolio of oral contraceptives, ophthalmology and possibly oncology in the domestic market.
•We retain Lupin as one of our top picks. At the current market price of Rs1,582, the stock trades at 20.7x FY2010E fully diluted earnings and at 16.8x FY2011E fully diluted earnings. Given the strong product portfolio and earnings visibility, we value Lupin at the average of our FY2011 and FY2012 earnings estimates. We maintain our Buy recommendation on the stock with a revised price target of Rs1,760.

Source:  ShareKhan Research Report