Lupin shares experienced a significant decline of 4% to hit a seven-week low of ₹2,273.90 on Monday, as reported by Business Standard. The stock has underperformed the market substantially in recent months, falling 9% in the past month compared to a 1.4% gain in the BSE Sensex and a 2.6% rally in the BSE Healthcare index. In the past two trading days alone, the pharmaceutical stock declined 5%, significantly underperforming the broader market. The stock is currently trading at 27x/21x FY28E/FY29E EPS and 36x/29x on core FY28E/FY29E EPS, which analysts consider expensive given the outlook for flat earnings growth and the company's concentrated product portfolio.
Lupin Ltd. delivered impressive first-quarter results with consolidated net profit rising 16.1% year-on-year to ₹1,417 crore from ₹1,221.46 crore in June 2025. According to Business Standard, consolidated sales rose 33.3% YoY to ₹8,217 crore as against ₹6,134 crore in the year-ago period. North America sales grew 43% YoY to $366 million, led by Tolvaptan, while India sales rose 14% YoY driven by cardiometabolic therapies. The strong top-line growth reflects healthy performance across key markets and product segments, with the company successfully executing its strategy of launching high-margin complex generics in the US while maintaining steady growth in the domestic market.
The management indicated that Tolvaptan competition will increase from Q2, with Apotex and Teva entering the market and a potential fourth entrant by September 2026, resulting in pricing pressure and market share redistribution, as reported by Business Standard. US growth momentum is expected to moderate as Lupin faces competition in two key products with management guiding for US annual sales of $1.1 billion in FY27. While the company has a strong US launch pipeline, analysts believe new launches would largely help maintain the current level of US sales, albeit at lower profitability. Incremental competition in Tolvaptan and Mirabegron will weigh on near-term performance, with management expecting quarterly sales of $250–280 million going forward versus $366 million in Q1FY27.
Despite strong quarterly results, analysts have revised their outlook significantly. Systematix maintains a 'Hold' rating on Lupin citing intensifying competition in the US market that could weigh on growth and margins in coming quarters. The brokerage has revised its target price to ₹2,284 from the earlier ₹1,992, valuing the stock at 24x core EPS rolled forward to June 2028. Motilal Oswal Financial Services lowered its earnings estimate by 6% for FY27 to factor in increased depreciation and a higher tax rate, setting a target price of ₹2,500 at 22x 12-month forward earnings. JM Financial expects overall reported earnings growth to remain flat-to-negative over the next two years, with analysts expecting Lupin to deliver Revenue/EBITDA/PAT growth of 5%/-6%/-15% respectively over FY26-28E. The company's annual consolidated financials reflect a remarkable turnaround story, with revenue surging from ₹16,405.48 crore in 2022 to ₹27,958.03 crore in 2026 and EPS improving from -₹33.65 in 2022 to ₹116.75 in 2026.
