Lupin soars 8%, hits over three-year high on heavy volumes

The stock surpassed its previous high of Rs 1,121.85 touched on September 2020 and was trading at the highest level since July 2017

Shares of Lupin hit an over three-year high of Rs 1,147 as they advanced 8 per cent on the BSE in intra-day trade on Wednesday on the back of heavy volumes. The stock of the pharmaceutical company surpassed its previous high of Rs 1,121.85 touched on September 18, 2020. It was trading at its highest level since July 2017.

The trading volumes on the counter more than doubled with a combined 6.97 million equity shares having changed hands on the NSE and BSE till 11:06 am. The S&P BSE Sensex and the S&P BSE Healthcare indices were up 0.56 per cent and 1.97 per cent, respectively at the same time.

Lupin on Monday, May 3, informed the stock exchanges that the meeting of the board of directors of the company is scheduled on May 15, inter alia, to consider and approve the audited financial results for the quarter and year ended March 31, 2021, recommend dividend, if any and other business matters.

Lupin is expected to post healthy operational performance during the January-March quarter (Q4FY21). Earnings before interest, taxes, depreciation and amortisation (Ebitda) margins are likely to improve 431 basis points (bps) to 18 per cent due to better overall operational performance, ICICI Securities said in a result preview.

The brokerage expects adjusted profit after tax (PAT) to come in at Rs 306 crore, down 5.7 per cent year-on-year (YoY) due to the higher tax rate assumption. Revenues are expected to remain subdued, up a mere 1.8 per cent YoY at Rs 3,915 crore while US sales are expected to de-grow 8 per cent YoY due to weak flu season, high base and sequential decline in Albuterol sales to be partly offset by growth in Levothyroxine and Metformin sales, the brokerage added. India business is expected to grow 8 per cent YoY to Rs 1,288 crore, it further said.

"Lupin lost market share in Albuterol in the initial part of the quarter but has regained some of the lost market share in March. We expect low-single-digit sequential growth for Lupin. We expect US revenue growth of $6 million quarter-on-quarter (QoQ) due to modest market share gain in gLevothyroxine and new product launches, partially offset by a decline in Albuterol sales," said Emkay Global Financial Services.

The India business is expected to grow 5 per cent YoY, driven by the chronic portfolio and EBITDA margin is expected to decline 75bps QoQ as other expenses bounce back, the brokerage said in its pharma sector update.