Lupin tanks after foreign brokerage downgrade

Lupin lost 6.41% to Rs 1,149 at 10:45 IST on BSE on reports that a foreign brokerage has downgraded the stock to outperform from buy earlier and has also lowered its target price to Rs 1,350 from Rs 1,760 earlier.

Meanwhile, the S&P BSE Sensex was up 162.89 points or 0.54% at 30,464.53.

On the BSE, 1.58 lakh shares were traded on the counter so far as against the average daily volumes of 83,005 shares in the past one quarter. The stock hit a high of Rs 1,180.65 so far during the day. The stock hit a low of Rs 1,133.70 so far during the day, which is a 52-week low. The stock had hit a 52-week high of Rs 1,750 on 29 July 2016.

The stock had underperformed the market over the past one month till 24 May 2017, sliding 9.87% compared with the Sensex's 2.18% rise. The scrip had also underperformed the market over the past one quarter, declining 15.53% as against the Sensex's 4.88% rise.

The large-cap company has equity capital of Rs 90.33 crore. Face value per share is Rs 2.

According to reports, the global brokerage stated that Lupin expects a challenging FY 2018 due to competitive/regulatory pressures in the US and Japan. US concerns are on account of continued customer consolidation, incremental competition in top products, and slower-than-expected Gavis ramp-up, it said. The brokerage further added that a few critical FY 2019 launches of the company have been pushed out to FY 2020.

Shares of Lupin had fallen 1.71% to settle at Rs 1,227.65 yesterday, 24 May 2017 after the company announced weak Q4 earnings during market hours on that day.

Lupin's consolidated net profit fell 49.16% to Rs 380.21 crore on 1.33% growth in total revenue from operations to Rs 4253.30 crore in Q4 March 2017 over Q4 March 2016.

During Q4 March 2017, the company made a provision for liability towards its Australian subsidiary amounting to Rs 155.90 crore in respect of compensation for patent litigation towards its Isabelle generic launch in Australia.

Lupin's shares witnessed selling pressure in the run-up to the announcement of its Q4 results. They had fallen 5.01% in two trading sessions to settle at Rs 1,249 on 23 May 2017, from its closing of Rs 1,314.90 on 19 May 2017.

Lupin is a pharmaceutical company developing and delivering a wide range of branded & generic formulations, biotechnology products and APIs globally.

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