Following the company's September quarter which came in line with market expectations, shares of Lupin rose 8% during intraday trade on Thursday, pushing the stock price to a six-month high. During the trade, the stock opened positively at ₹717.20 and continued to climb up to hit an intraday high of ₹754 in the early trade, but later on, it failed to hold on to that bullish direction and is currently trading at ₹716.50, up by 3.10% on the BSE at 03:00 p.m.
On Wednesday, Lupin reported a consolidated net profit of ₹130 crore, compared to a net loss of ₹2,098 crore in the corresponding quarter of last year. The revenue from operations surged to ₹4,145 crore for the September-ending quarter compared to ₹4,091 crore in a similar quarter last fiscal.
The company reported an operating profit of ₹453 crore in Q2, an increase of 95% when compared to ₹232.8 crore in the preceding quarter. The company posted a ₹1,323.8 crore operating loss in Q2 FY22. The EBITDA margin came in at 10.93% in Q2, up 472 basis points (bps) from the preceding quarter.
The profit before tax (PBT) during the quarter stood at ₹209.6 crore as against a loss of ₹2,204.8 crore in the year-ago quarter.
Commenting on the results, Mr Nilesh Gupta, Managing Director, Lupin Limited, said, "We have performed in line with our expectations during the quarter, and are on the path of steady growth in sales and profitability."
Following the release of the Q2 results, Japanese brokerage firm Nomura maintained its "buy" rating on the stock, with a target price of ₹863, representing a 18.21% increase over the stock's current market price. The brokerage believes that the recent acquisition of two inhalation brands, Xopenex and Brovana, will aid Lupin's EBITDA margin expansion, which they have currently not factored into their estimates, CNBC-TV 18 reported.
Research firm Macquarie has assigned an "outperform" call on Lupin with a target price of ₹790. The brokerage said that the company missed its profitability goals due to the absence of cost savings. EBITDA and profit numbers came in 14% and 45% below the estimates, respectively.
Earlier this week, Lupin said it had received approval from the US health regulator to market Doxycycline capsules used to treat bacterial infections in the American market. Adding to that, the company also received tentative approval from the US Food and Drug Administration (FDA) for its abbreviated new drug application (ANDA) for Doxycycline Capsules, 40 mg, a generic equivalent of Galderma Laboratories' Oracea capsules, PTI reported.
In terms of stock performance, the stock has returned a negative 23% over the last year. After reaching a 52-week high of ₹972 on December 14, 2021, the stock began to slide, and it remained in the same trend until May of this year, dropping 40% to hit a 52-week low of ₹583.
However, the stock has seen a surge in buying since June 17, rising 21.60% to date. Nonetheless, it is 26% lower than its one year high.
The promoters owned 47.1% of the shares in the company, while foreign portfolio investors and domestic institutional investors each owned 13.8% and 27.6%, respectively. Regular shareholders own 11.5%.
An average of 39 analysts polled by MintGenie have a 'hold' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.