Shares of Lupin fell as much as 2 percent on Thursday after CLSA slashed its earnings per share (EPS) estimate for the pharmaceutical company by 9-16 percent for FY23-25.
The brokerage firm also cut its target price on the stock to Rs 640 from Rs 660.
At 1246 IST, shares of Lupin fell 1.7 percent at Rs 609.65 on the BSE. The scrip was about 5 percent away from its 52-week low of Rs 583.05.
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The cut in EPS and target price was largely because CLSA thinks that margin stress is mainly due to underutilised capacities for the US market. It further believes that Lupin will need to take tough decisions like shutting down sites and ironing out redundancies.
The US launches in the second half. which are subject to the approval of the US Food and Drug Administration, can lead to better overhead absorption, CLSA said. The contribution of some of those big launches is only for a limited timeframe, it added.
Lupin, the world’s tenth-largest generic pharma company, has 15 state-of-the-art manufacturing facilities spread across India, the US, Brazil, and Mexico.
First Published: Jun 30, 2022 12:51 PM IST
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