Mehabe score: 2 G Factor: 3 Piotski Score: 7 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 7.
Description
Lupin is engaged in the business of Manufacture of Pharmaceuticals. Site:LUPIN Main Symbol:LUPIN
Stock trades at 879.0, below its 50dma 921.18 and below its 200dma 970.94. The stock remains bearish on technicals
The 52 week high is at 1267.65 and the 52week low is at 853.50
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– Stock is trading at 3.35 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 1.24% over past five years.
– has a low return on equity of 3.59% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 20.2x. Divi’s Lab. trades at the industry’s max P/E of 54.07x. LUPIN trades at a P/E of x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 8.0. LUPIN has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is -8.9%. The max 1- month return was given by Granules India: a return of -0.79 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 4161.0 cr compared to Rs 4017.0 cr for period ended Dec 2020, a rise of 3.6% .
vis-vis 779.0 for period ended Dec 2020 .
Operating Margins contracted -1050.0 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 370.0 cr for period ended Dec 2021 and operating profit margin at 8.9 % for same period.
The EPS for quarter ended Dec 2021 is Rs 12.01 compared to Rs -46.21 for previous quarter ended Sep 2021 and Rs 9.66 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 16306.0 cr for period ended TTM vis-vis sales of Rs 15163.0 cr for the period ended Mar 2021, a growth of 7.0%. The 3 year sales cagr stood at 3.6%.
Operating margins shrank to 4.0% for period ended TTM vis-vis 17.0% for period ended Mar 2021, contraction of 1300.0 bps.
Net Profit reported at Rs -550.0 cr for period ended TTM vis-vis sales of Rs 1217.0 cr for the period ended Mar 2021, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 1822.0 cr for period ended Mar 2021 vis-vis Rs 1469.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 4.0% over the last 3 Years. – The stock has given a return of -14% on a 1 Year basis vis-vis a return of 2% over the last 3 Years. – The compounded sales growth on a TTM bassis is 8% vis-vis a compounded sales growth of -1% over the last 3 Years. – The compounded profit growth on a TTM basis is 2% vis-vis a compounded profit growth of 61% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 15.28% vis-vis 15.66% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 12.79% vis-vis 12.76% for Sep 2021
Conclusion
– has reduced debt. – Stock is trading at 3.35 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 1.24% over past five years.
– has a low return on equity of 3.59% for last 3 years.
– might be capitalizing the interest cost
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 921.18 and is trading at 879.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
