Technically, Lupin (CMP:1886), has to sustain over 1913-1932 area for an immediate to mid term target of 1960-2000-2025 & 2045-2115. Only consecutive closing above 2115, it may scale 2275- 2350-2500 area in the long term under bullish market conditions (FY:16-18).
On the downside, failure to sustain over 1913, Lupin may fall towards 1870-1852-1830-1807-1790 area immediately. Consecutive closing below 1790, it may further fall to 1770-1737-1721 & sustain below that came 1675* & 1600 territory will act as strong support (buying) zone in the near term.
Thus in brief, 1790-1810 & 1913-1932 is now strong demand & supply zone for Lupin and only sustaining above 1932, the new supply zone might be around 2045 & 2115 in the next phase of cycle.
Bottom Line: Technical Trading Levels (Positional)
| SL</>10 | FROM SLR | |||||||||
| Lupin | CMP | 1886 | ||||||||
| T1 | T2 | T3 | T4 | T5 | T6 | T7 | SLR | |||
| Strong > | 1930 | 1960 | 2000 | 2025 | 2045* | 2085 | 2115 | 2150 | <1910 | |
| Weak < | 1910 | 1870 | 1852 | 1830 | 1807-1790* | 1770 | 1737-1721 | 1675 | >1930 | |
Lupin is going into various meaningful alliances & strategic brand acquisitions across various product segments and geographies, specially in developed and also lucrative US & Canada market along with its own development (R&D). Thus apart from domestic market, Lupin has traditionally very good market in US (nearly 45% of its revenue) along with great reputation of "quality generic drugs" unlike some other Indian pharma majors.
But near term headwinds may be slow US FDA approval for new products pipelines (generics) and consolidation among buyers (large pharmacy chains) leading to pricing pressure. Again, this is a industry wise problem and US FDA is working hard to reduce the the average approval time gaps from present 42 months to 12 months by 2017. Thus, there is limited opportunity in organic growth and Lupin is looking for various suitable inorganic growth with focus on branded & complex generics, backed by its considerable balance sheet strength.
By 2020, Indian pharma companies may face considerable challenges in the form of R&D, as nearly half of the drugs, that will go off patent will be biologics and require complex capabilities, if generic players wish to make them biosimilars.
Looking ahead, complex generics will be the future & will require considerable higher investments unlike copycat drugs that Indian Pharma companies have so far been manufacturing. Thus there may be significant structural changes in global pharma industry in the days ahead.
Lupin intends to be a $5 billion company over next three years and $1 billion sale will be through various acquisitions.
As par BG metrics, current median valuation of Lupin may be around 1850 & projected fair valuations are around 2000-2200-2350 (FY:16-18) in the current market trends.
But near term headwinds may be slow US FDA approval for new products pipelines (generics) and consolidation among buyers (large pharmacy chains) leading to pricing pressure. Again, this is a industry wise problem and US FDA is working hard to reduce the the average approval time gaps from present 42 months to 12 months by 2017. Thus, there is limited opportunity in organic growth and Lupin is looking for various suitable inorganic growth with focus on branded & complex generics, backed by its considerable balance sheet strength.
By 2020, Indian pharma companies may face considerable challenges in the form of R&D, as nearly half of the drugs, that will go off patent will be biologics and require complex capabilities, if generic players wish to make them biosimilars.
Looking ahead, complex generics will be the future & will require considerable higher investments unlike copycat drugs that Indian Pharma companies have so far been manufacturing. Thus there may be significant structural changes in global pharma industry in the days ahead.
Lupin intends to be a $5 billion company over next three years and $1 billion sale will be through various acquisitions.
As par BG metrics, current median valuation of Lupin may be around 1850 & projected fair valuations are around 2000-2200-2350 (FY:16-18) in the current market trends.
| SCRIP | EPS(TTM) | BV(Act) | P/E(AVG) | LONG TERM | SHORT TERM | MEDIAN VALUE | 200-DEMA | 10-DEMA |
| LUPIN | 53.42 | 154.08 | 36.05 | 1776.21 | 1919.14 | 1847.68 | 1638.25 | 1912.52 |
| LUPIN | 61.15 | 198.75 | 36.05 | 1900.38 | 2053.31 | 1976.84 | 1638.25 | 1912.52 |
| LUPIN | 75.18 | 256.4 | 36.05 | 2107.14 | 2276.71 | 2191.92 | 1638.25 | 1912.52 |
| LUPIN | 86.15 | 330.75 | 36.05 | 2255.64 | 2437.16 | 2346.40 | 1638.25 | 1912.52 |
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