Real Estate

LUPIN Headquartered in Mumbai, India, Lupin Limited today is an
innovation led transnational pharmaceutical company producing a wide
range of quality, affordable generic and branded formulations and APIs
for over 70 countries in the world. Lupin remains amongst the prolific
R& D spenders in the industry which we believe bodes well for its
growth.
Lupin remains the 5th largest Generic player in the U.S. in terms of
prescriptions (IMS Health).

Lupin emerged as the market leader (No. 1 by market share) in 13 out
of 29 generic products in
the U.S. and 28 out of these 29 generic products rank in the Top 3
positions by market share

Pharma Major, Lupin Ltd. reported a top-line growth of 17% and net
profit growth of 39% for the third quarter, FY 2010-11.
Key Financial & Performance Highlights
• Net sales grew by 17% to Rs. 14,672 million during Q3, FY 2010-11,
up from Rs. 12,554 million (Q3, FY 09-10)
• Net profits grew by 39% to Rs. 2,240 million during Q3, FY 2010-11,
as compared to Rs 1,606 Mn. (Q3 FY 09-10)
• Earnings before Interest, Tax, Depreciation and Amortization
(EBITDA) grew by 15% to Rs. 3,007 Mn. during Q3, FY 2010-11, from Rs.
2,619 Mn. (Q3 FY 09-10).

Operational Highlights
• Advanced markets Formulation sales (including US, Europe & Japan)
increased by 15 % to Rs. 7,382 Mn. during Q3, FY 2010-11, up from Rs.
6,426 Mn. (Q3, FY 2009-10). It contributed 50 % of the Net Sales for
the Quarter.
• Formulation Sales in US and EU grew by 15% to Rs 5,655 million
during Q3, FY 2010-11, up from Rs. 4,937 Mn., (Q3, FY 2009-10).
• Lupin emerged as the market leader (No. 1 by market share) in 13 out
of 29 generic products in the U.S. and 28 out of these 29 generic
products rank in the Top 3 positions by market share.
• Lupin's Japanese subsidiary, Kyowa grew by 16% to Rs. 1,727 Mn
during Q3, FY 2010-11 and contributed 12 % of the overall revenues
during the quarter.
• Net Sales of India Region Formulations grew by 16% to Rs. 4,005
million during Q3, FY 2010-11 as compared to Rs. 3,446 million (Q3, FY
2009-10).
• Sales for Lupin's South African subsidiary, Pharma Dynamics grew by
42% to Rs. 498 Mn. during Q3, FY 2010-11 as against Rs. 352 Mn (Q3, FY
2009-10.)

EXPANSION PLANS :

• Lupin is investing Rs.450 cr on capacity expansion, ramping up sales
force and launching new products.
• The company has already expanded its reach from 890 medical
representatives 3 years back to 3,500 at present and is looking to
hire more employees this fiscal in India.
• It is also looking for acquisitions in the Indian market if they fit
into its overall growth strategy for the next 3 years.
• Lupin is scouting for acquisitions in Latin America, and is in talks
with at least a couple of potential candidates in Brazil and Mexico,
VinodDhawan, the company's president in charge business development.
The company hopes to achieve revenue of $150 million from Latin
America by the financial year 2012-13 , when the company is targeting
annual revenue of $3 billion, three times that of the revenue in 2010.
The company made its first step in that direction, Farmanguinhos,
Brazil's largest public sector healthcare unit, will source all its
four-in-one tuberculosis vaccine from Lupin. Analysts said the deal
may generate about $15-20 million revenue annually for Lupin. Dhawan,
who heads Asia, Africa, Mid-East, Latin America businesses for Lupin,
said the company also expects to see a major surge in revenue from
Japan.

• Lupin has got a rich pipeline for various geographies. They have
close to about 145 filing for America as of now; and there could be a
few more by the end of this fiscal .They are launching around 12 to 15
products. They also plan come up with three to four products in the
oral contraceptive range as well.
• Lupin's profit margin has gone up from 14% to 20% ie on an average
50 to 70 base points increase, owing to better realization of products
& cost reduction.
• Lupin has grown from manufacturing of medical ingredients to
manufacturing of bulk medicine. With its hold in global market, entry
in bulk pharma has high potential for growth.
• According to an article in Business Standard, the recent scenario in
Japan will prove to increase Lupin'ssubsdiary Kyowa Pharma's sales in
Japan due to rise in health problems specifically of central nervous
system & Gastro-intestinal, Kyowa being a market leader in these
segments.

Intact growth in FY 2011-12 due to 1) Visibility increases in launches
in US. 2)OCs launch from Sep 2012E.3) Minimal threat of generic
competition to Suprax. 4) Growth taking place in pharma industry
globally.

We believe the recent fall in stock is a good opportunity point as
long term drivers are intact.
We recommend 'BUY' on the stock at CMP 394 with a target price of Rs.
540.. Valuing it at 20x FY2012E earnings.

DISCLAIMER:- Smart Profit has taken due care and caution in
compilation of data for its reports. The market view and investment
tips expressed on Smart Profit are in no way a guarantee either
express or implied. However, Smart Profit does not guarantee the
accuracy, adequacy or completeness of any information and is not
responsible for any errors or omissions or for the results obtained
from the use of such information. The directors of Smart Profit may
hold a position in the recommended script.

FOR FUTHER DETAILS CONTACT:-
SUMAN JAIN
(CEO)
+919820041126
Email: sumanjain@smartprofit.in

ANKITA JAIN
(Director)
+919819854402
Email: ankita@smartprofit.in

DIPAK MANGELA
(Research Analyst)
+919820260291
Email: dipak.mangela@smartprofit.in

MANSINGH RAI
(Customer Care Executive)
+919320907684
Email: mansingh.rai@smartprofit.in

SHAILESH GOWDA
(Customer Care Executive)
+919967394114
Email: shailesh.gowda@smartprofit.in

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