Incredible Stocks - Lupin Limited

Lupin Limited is a well-known Indian pharmaceutical company which is the 4th largest by sales in India. It has established itself as an integrated global pharmaceutical company. 

Lupin’s products are well known in India and the world over too. In the therapeutic area Lupin’s anti-TB drug is No.1 globally.
Its anti-asthma drug and anti-cardiology drug are 3rd in India. Lupin also manufactures drugs for anti-diabetes, neurology and gynaecology etc. The company operates in various business verticals such as API, drug formulation, CRAMS, new drug discovery etc. Constantly delivering new products and having a good product pipeline is the growth sign of a good pharmaceutical company.

Currently the company is positioned as the 5th largest generic (low cost high quality) drug supplier in the US. It is estimated that the generic drugs sales in the US is going to double from $46bn to $80bn by 2016. Lupin has already geared itself up to the present and future US generic market with a cumulative ANDA filing with 176 approvals.

Following is a quick-look at the financials of the company :

	2013	2012	2011	2010	2009	CAGR%
Sales (in Cr)	9461	6959	5706	4870	3914	24.69
Profit (in Cr)	1314	867	862	681	507	26.88
OPM%	22.09	19	18.66	20.18	18.88
ROCE%	27.35	19.11	19.88	22.90	24.45
ROE%	25.25	21.61	26.27	26.52	35.60
Debt/Equity	0.14	0.3	0.22	0.39	0.06
Interest Coverage Ratio	42.87	31.25	26.29	22.63	13.02

Lupin is presently trading at P/E of 30 and P/E of 24 FY14.

CMP at the time of post was Rs. 900.60

The branded drugs business currently contributes 21% of total US sales and generic business contributes 79% of US sales as on FY13. US & EU contributes 42% of Lupin’s global revenues. India contributes 25% to the revenues and rest of the world contributes 23% of the revenues. API contributes 10% of revenues. The FY 2012-13 Annual Report is accessible here.

The global and Indian markets have massive growth opportunities for Lupin which has a presence in both the branded and generic drug markets. It is continually enhancing its market share and diversifying its portfolio by entering into new therapeutic areas. From this perspective Lupin looks as a good stock option.

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