Result Update

February 10, 2017

Rating matrix
Rating : Buy
Lupin (LUPIN) | 1478
Target : | 1760
Target Period : 12-15 months
Potential Upside : 19% US drives good overall performance…
• Revenues grew 26% YoY to | 4483 crore (I-direct estimate: | 4351
What’s Changed?
crore) mainly on account of 58% growth in the US to | 2176 crore (I-
Target Changed from | 1890 to | 1760
direct estimate: | 1988 crore). Strong US sales were due to Gavis
EPS FY17E Changed from | 62.9 to | 62.2
EPS FY18E Changed from | 67.1 to | 67.5
consolidation and robust sales in Metformin (anti-diabetic). Domestic
EPS FY19E Changed from | 85.7 to | 83.8 sales grew 12% YoY to | 991 crore (I-direct estimate: | 976 crore)
Rating Unchanged • EBITDA margins improved 245 bps YoY to 27.1% (I-direct estimate:
24.0%) mainly on account of a strong gross margin performance and
Quarterly Performance lower other expenses
Q3FY17 Q3FY16 YoY (%) Q2FY17 QoQ (%) • PAT grew 19% YoY to | 631 crore (I-direct estimate: | 624 crore) due
Revenue 4,482.9 3,555.8 26.1 4,290.5 4.5 to a strong operational performance partly offset by higher tax rate
EBITDA 1,215.8 877.2 38.6 1,028.1 18.3 US business main growth engine despite pricing headwinds
EBITDA (%) 27.1 24.7 245 bps 24.0 316 bps
Lupin’s US business (~43% of total turnover) is witnessing a shift from
Net Profit 630.7 529.8 19.1 658.0 -4.1
branded to generics with a slowdown in the branded space and
emergence of generics. Post the acquisition of US based Gavis, the
Key Financials company now owns one of the strongest ANDA pipeline comprising 344
(| Crore) FY16 FY17E FY18E FY19E filed ANDAs and 137 pending approvals including 44 FTFs. This
Revenues 14208.5 17654.1 19589.7 22095.3
acquisition will strengthen its position in dermatology, controlled
EBITDA 3733.4 4654.5 5036.8 6012.5
substance products and other high value niche generics segments
Net Profit 2270.7 2801.8 3041.6 3774.5
EPS (|) 50.4 62.2 67.5 83.8
besides its maiden foray into US institutional business. We expect US
sales to grow at 18% CAGR in FY16-19E to | 9642 crore.
Indian formulations growth steady
Valuation summary
FY16 FY17E FY18E FY19E Lupin ranks seventh in domestic formulations with a market share of
PE (x) 29.3 23.8 21.9 17.6 3.3%. The acute: chronic: sub-chronic ratio for the company is at
Target PE (x) 34.9 28.3 26.1 21.0 27:40:33. In terms of MR productivity, at | 60 lakh per MR it has one of
EV to EBITDA (x) 19.5 14.9 13.4 10.8 the best MR productivity among large cap peers. Also, tie-ups with Eli
Price to book (x) 6.1 5.0 4.2 3.5 Lilly, Boehringer for anti-diabetics and with MSD for pneumonia vaccines
RoNW (%) 20.7 21.1 19.2 19.9 are some steps to bolster the domestic franchise. We expect sales from
RoCE (%) 18.6 20.3 20.8 23.9 India to grow at a CAGR of 13% in FY16-19E to | 4951 crore.
Core strength in geographical diversification, strong financials
Stock data Lupin is bearing the fruits of geographical diversification for broad based
Particular Amount growth. It has established a significant presence in the US by 1) focusing
Market Capitalisation | 66696 crore on limited competition/FTF opportunities, 2) concentration on niche
Debt (FY16) | 5720 crore therapies such as oral contraceptives, dermatology, ophthalmology,
Cash (FY16) | 1417 crore
respiratory, etc, and 3) acquiring small but profitable brands at the right
EV | 70999 crore
52 week H/L (|) 1905/1280
price. It is slowly but surely establishing itself in other geographies such
Equity capital | 90.3 crore as Japan and Australia. Higher growth on a fairly consistent basis, a
Face value (|) |2 strong balance sheet (despite Gavis acquisition) and high return ratios are
some of the differentiators for Lupin besides management pedigree.
Price performance (%) Despite challenges, outlook upbeat on strong pipeline; maintain BUY
1M 3M 6M 1Y Both 9MFY17, Q3 have demonstrated strong gross margins and robust
Lupin 0.1 -2.5 -7.2 -21.7 US growth mainly due to Gavis consolidation, Metformin (Diabetic)
Dr Reddy's -1.2 -7.9 -0.5 2.1 traction. The overall profitability was strong despite higher R&D and new
Sun Pharma 3.7 -0.8 -21.0 -23.2 recruitments/capex at Gavis. With the Goa EIR (Indore earlier), the
company can focus on launches at a regular interval. The management is
Research Analyst now guiding for 25+ launches annually in the US in FY18. It expects the
Siddhant Khandekar
trend to continue, going ahead. Ramp up at Gavis is also likely to support
siddhant.khandekar@icicisecurities.com launches. With one of the strongest pending pipelines in the US (137
pending approvals) at its disposal, the company is well poised to address
Mitesh Shah the pricing issue. India and Japan are likely to complement the US driven
mitesh.sha@icicisecurities.com growth. However, due to multiple overhangs in the US for generic players
we have reduced our multiple to 21x from 22x earlier. Accordingly, our
new target price is | 1760 based on FY19E EPS of | 63.8.

ICICI Securities Ltd | Retail Equity Research

8 283.8 19.2 113.8 20.652.364.2 26.5 242.8 4.589.9 -0.1 25.386.3 5.8 Strong sales was mainly due to favourable currency movement.7 290.5 26.036.145.3 9.5 436.218.1 1.004.4 27.5 4.5 26.9 1.4 511.7 26.3 YoY increase in depreciation mainly due to Gavis amortisation Other Income 103.7 1.6 1.2 million South Africa 112.0 995.301.5 Tax 409.7 1.305.2 20. Constant currency growth in Germany was 26.2 877.801.916.5 0.8 157.028.8 1.9 QoQ growth was mainly due to incremental product launches.6 YoY growth mainly due to strong growth across geographies API 268.9 158.5 529.2 8.0 19.6 Increased mainly due to higher R&D expenses.2 111.1 1.5 Source: Company.1 1.6 18.290.123.8 11.0 1. In constant currency.1 24.1 67.117.6 1.654.482.2 3.2 469.2 107.234.2 1.285.1% YoY to €7.9 211.9 Minority Interest 2.7 -3.835.8 27.5 9.5 YoY growth was impacted by 2-3% due to demonetisation Japan 449.7 4.3 8.0 3.151.100.913.5 1.4 Japan 1.5 1.3 27.6 YoY and QoQ increase mainly due to higher deferred tax.7 EPS (|) 62.4 289.com Research ICICI Securities Ltd | Retail Equity Research Page 2 .6 Assumptions Current Earlier Comments (| crore) FY15 FY16 FY17E FY18E FY17E FY18E India 2.6 1.8 119.4 2.194.8 8.3 2.3 400.9 4.9 1.4 17.027.555.6 1.8 208.804.Variance analysis (| crore) Q3FY17 Q3FY17E Q3FY16 Q2FY17 YoY (%) QoQ (%) Comments Revenue 4.214.256. ramp up in Methergine and seasonality benefit. which have taken away some benefits from generic players US 5.987.9 4.3 -8.6 8.2 455.3 74.635.8 585.307.839.1 259.2 -3.6 866.0 1.1 253.351.4 4.8 1.9 62.4 531.9 40.437.4 528.8 57.0 24.8 88. Normalised tax rate was 28% PAT before MI 633.9 123.1 2.7 24.4 0.5 2.968. Beat vis-à-vis I- direct expectations mainly due to strong gross margins and forex impact Interest 45.406.1 Change in estimates FY17E FY18E (| Crore) Old New % Change Old New % Change Revenue 18.323.6 282.6 Europe 326.375.0 ROW markets 706.8 -1. Constant currency growth was 2.265.042.1 67.7 886.4 211.3 566.1 38.4 3.4 API 1.9 -5.0 4.2 -5.1 YoY lower growth vis-à-vis EBITDA was mainly due to higher tax rate Key Metrics India 991.8 206.1 58.1 4.4 712.3 1.044.5 5.215.8 658.2 531.7 121 bps Increased margins estimate in line with management guidance and improvement in product mix PAT 2.8 399.4 16.3% US 2.437.6 0.242.943.5 25.9 29.194.4 65. market share gain in gGlumetza.4 947.6 Increased mainly due to new recruitments at Gavis new facility in the US Other Expenditure 1.2 975.2 -1.4 9.9 817.021.7% YoY to | 578.3 1.380.4 38.8 112.9 EBITDA 4.5 0.7 104.0 245 bps 316 bps YoY margin improvement mainly due to strong gross margin.794. Beat vis-à-vis I-direct expectations was mainly due to higher-than-expected market share gain in gGlumetza and new product launches Europe 142.1 -2. Japan's total sales grew 5.0% mainly on the back of better product mix Employee Expenses 731.7 623.4 186 bps 24.4 7.168.1 624.7 255 bps YoY improvement in gross margins to 71.2 674.1 -4.305.7 445.9 2.2 Changed mainly due to Japanese government implementation of new reforms for generic drugs.8% ROW markets 265.659.9 373.175.5 YoY revenue growth mainly driven by robust growth in the US Raw Material Expenses 1.7 125.5 291.5 3.7 20.3 0.6 Depreciation 230.997.6 63.0 515.3 crore EBITDA 1.1 Higher mainly due to forex gains PBT 1.0 Beat vis-à-vis I-direct estimates mainly due to higher-than-expected YoY constant currency growth in Germany.9 821.4 19. R&D expenses increased 47.3 EBITDA (%) 27.041. ICICIdirect.9 4.2 1.327.7 EBITDA Margin (%) 24.0 3.8 South Africa 421.3 Miss vis-à-vis estimates mainly due to lower-than-expected constant currency growth.5 1.2 1.3 1.9 15.8 0.5 518.1 5.654.3 450.455.3 3.5 Net Profit 630.0 658.

Exhibit 1: Return ratios to improve further Exhibit 2: R&D spend likely to remain at elevated level 40 35. 29% and 29%. biosimilars from the current ANDA/NDA albeit gradually to prepare for the scenario beyond 2020. continued traction in Indian branded formulations with higher chronic focus and improvement in the Japanese market. Over the last 10 years. we believe the company is well poised to grow at a healthy rate given the strong US pipeline.com Research The current financial health of the company is the culmination of prudent business decisions in the past. it changed focus in therapies - from acute to chronic and also geographies. Antara. in the near term. Besides this.4 25. which is perhaps the only geography where there is a scope for improvement. Dr Reddy’s. the company has been fairly active on the global M&A front. Philippines and South Africa.3%. However.4 20 9. Established in 1968.3 7 600 465. in FY16-19E. Infrastructure - 11 manufacturing facilities including two in Japan – seven formulations (three USFDA approved) and four APIs (two USFDA approved). During this journey. we expect revenues.5 26. It has acquired companies in Japan (significant acquisitions).813 30 22.1 9 (%) 18.1 15 2100 35 35. Similarly.7 7. Going ahead.9 21. the R&D spend as a percentage of sales has gone up from 8.com Research Source: Company. during the same period. EBITDA and PAT have grown at a CAGR of 15%. Lupin has come a long way to emerge as a leading Indian generic exporter. the company adapted well as per the changed industry dynamics like other peers such as Sun.1 1200 929. NCEs.64 10 5. It received USFDA approvals for two facilities- Ankaleshwar and Mandideep way back in 1989. Australia. Ranbaxy and Cipla. | 3733 crore and | 2271 crore.6 27. in FY12-16. ICICIdirect. respectively. 17% and 19%.6 681. from domestic driven to export oriented. however. vast experience and good understanding of the US market. Inspira Chamber and Alinia). we see the composition spend tilting towards NDDS.2 6.1 26. Locoid lotion. from a long term perspective. the company also acquired small ticket but lucrative brands in the US (Suprax. respectively. 14% and 10% to | 14209 crore. Its latest acquisition.6 21. revenue. Similarly. EBITDA and PAT have grown at a CAGR of 24%.5 1500 11 25 25.3 1099 21. has been a complex injectable technology based company (Nanomi) in the Netherlands.6 20.8 12.8 7.3 900 6.0 300 5 5 0 0 3 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E RoNW RoCE R & D cost (| crore) R & D cost % revenues Source: Company. ICICIdirect. On the R&D front.8 1800 1604 12. Company Analysis From a global leader in anti-tuberculosis (TB) and other infectious diseases to one of the fastest growing prescription companies in the US. EBITDA and PAT to grow at a CAGR of 16%.4 26.95 500. revenues. Considering more recent numbers. respectively. ICICI Securities Ltd | Retail Equity Research Page 3 .7 15 20.7 29.2% to 11.

6 in chronic therapies.3%.com Research ICICI Securities Ltd | Retail Equity Research Page 4 .0 Revenues to grow at a CAGR of 16% in FY16-19E to 11286. 137 pending approvals and 207 approvals).8 2000. It is planning to launch more than 150 (100 8437.1 strengthen its position in dermatology.com Research Lupin is the fifth largest generics player in the US in terms Exhibit 4: New product launches to drive growth in US market of prescriptions.0 4887. Lupin is one of the few generic companies that 0. Currently.0 1573. We expect sales from India to grow at a 2000.8 opportunities.0 2968.3 21000 19589.0 13.0 500.0 segments besides its maiden foray into US institutional business.7 14.3% CAGR 4951. which includes 12000.3 | 22095 crore driven by 18% growth in the US business.3 owns and 50 from GAVIS) products in the US market in 8000.0 5659. 9000 7082.0 domestic market.0 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E India (| crore) Source: Company.1 18000 14208. The company is adding more drugs 3000. Acquisition of Gavis will also 6000.0 substance products and other high value niche generics 2079.9% CAGR 22095.3% CAGR 4305.2% CAGR 8916.0 CAGR of 13% in FY16-19E to | 4951 crore 1500.9 12% in European markets and 13% growth in Indian 6000 formulations business 3000 0 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E Source: Company.9% in FY16-19E 24000 15.5 1350.1 5000.0 market share of 3.0 1000. Exhibit 3: Revenues to grow at CAGR of 15.0 3794. we expect sales from the US market to grow at a CAGR of 28% in FY16-19E to | 9642 crore Exhibit 5: Indian formulation sales to grow at CAGR of 13% in FY16-19E 5500.0 20.com Research branded space. controlled 3769. 14% in South Africa. ICICIdirect.0 Lupin is ranked seventh in domestic formulations with a 3406.0 2479. It owns a healthy product pipeline 17. US (| crore) including two that were in-licensed in the last 12 months.2 the next four or five years. (| crore) 32% in Japan.0 4000.3 5913.0 has a presence in the branded business.5 15000 12770. ICICIdirect.1 10000.4 3500. ICICIdirect. which would drive growth in the 2500.0 0. it is FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E marketing four branded products in the US market.0 some limited competition products and 44 FTFs 9642.5 4000. With a strong product pipeline in both the generic and Source: Company.3 4500. 15% in RoW markets.0 23.6 12000 9641.7% CAGR (including Gavis) in the US (344 ANDAs filed.9% CAGR 17654.

com Research Exhibit 8: Net profit to grow at CAGR of 19% in FY16-19E 4000 3774.0 products from Shionogi. the I’rom 1500.9 1364.0 business remains challenging due to the lumpy nature of 860.2 31 6013 6000 26.8 16.8 19 3500 3041. Exhibit 6: Japanese revenue to grow at CAGR of 33% in FY16-19E 3500.5 19.4 25.0 The Japanese acquisitions i.0 expected to improve on the back of back-ended 1304.2 integration by sourcing of APIs from Goa. 0.5 2000.7 13.3 26.4 1323.8 1000.com Research Exhibit 7: EBITDA to grow at CAGR of 17% in FY16-19E 7000 28.5 2403.0 We expect sales from Japan to grow at a CAGR 33% in FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E FY16-19E to | 3173 crore mainly due to increase growth Japan (| crore) in existing business and consolidation of Shionogi’s portfolio.1 1314. ICICIdirect.0 15.com Research ICICI Securities Ltd | Retail Equity Research Page 5 .7 29 27.4 13 2000 1382.5 18.2 15 2500 2270.0 the CRAMS business.0 1295. ICICIdirect. Source: Company.3 2801. Kyowa and I’rom are yet to 2437.7 25.0 scalability and profitability.9 15.7 achieve expected critical mass both in terms of 2500. While Kyowa profitability is 1839.6 17.1 17 3000 16. Recently acquired 21 products from Shionogi will add to the company’s overall growth. ICICIdirect.e.0 3172.6 1836.7 5037 4655 27 5000 23.5 3733 25 4000 3620 (| crore) 2899 23 (%) 3000 2270 1959 21 2000 19 1000 17 0 15 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E EBITDA EBITDA Margins (%) Source: Company. Kyowa has acquired 21 branded 500.1 11 1500 1000 9 500 7 0 5 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E Net Profit Net Profit Margins (%) Source: Company.3 27.6 3000.

3 323.0 852.5 345.8 25.3 13.7 % of Revenue 37.0 761.0 Other income 32.9 15.6 14.0 14.0 3120.9 31.SWOT Analysis Strengths .8 2.6 3357.8 530. proposed tightening by the new regime by adapting to the bidding process and imposition of border adjustment tax on imported drugs in the US.6 410.4 13.6 66.1 103.6 282.3 174.1 528. Opportunities .6 657.5 27.8 66.8 206.5 Total Expenditure 2248.0 122.0 4.6 71.7 32.9 3192.2 101.6 638.7 389.6 API 297.1 142.1 27.5 2187.8 632.8 23.8 India 650.1 245.3 145.1 75.4 983.9 415.4 4.1 19.6 2.9 16.0 71.1 19.2 68.7 31.9 980.9 1123.7 2865.6 26.5 PAT After MI 475.3 14.9 -0.6 208.9 80.8 2432.2 26.5 0.0 29.7 629.1 31.0 21.8 886.3 3.1 33.3 4313.8 2172.3 275.6 418.9 400.5 882.5 1124.0 19.5 12.4 35.9 105.0 623.4 26.6 2204.3 RoW 142.8 1153.0 69.4 33.4 613.6 58.9 12.0 87.7 74. One of the best working capital management in the industry with strong return ratios and ever improving margins.0 743.8 72.6 27.7 19.1 552.2 17.1 4.2 21.9 4.7 86.4 73.4 1027.6 26.1 15.5 799.3 850.7 24.9 56.4 148.8 Revenues 3022.4 73.9 820.9 79.5 40.7 1041.9 107.6 3284.9 705.9 13.3 115.9 66.2 850.7 110.5 27.2 225.6 10.2 27.3 18.5 24.6 1155 1380.2 2667.3 29.7 3131.9 PAT Margin (%) 16.8 20.2 31.3 1377.5 283.9 28.4 832.8 25.7 402.5 39.6 18.3 -8.5 1307.2 205.4 824.3 1186.2 232.9 24.8 3167.3 13.8 65.6 15.2 294.4 292.3 -3.6 % of Revenue 12.9 110.9 125.8 16.0 3080.3 PBT 736.2 12.9 1605.1 2.1 Source: Company.3 420.8 341.1 290.7 2.4 3262.4 577.5 325.7 1469.8 68.6 436.8 264.4 438.0 3051.9 192.9 30.8 3173.7 191.4 3267.6 238.4 2.7 3555.4 -316.8 113.5 288.0 123.6 956.Exhibit 9: Trends in quarterly financial performance (| crore) Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 YoY (%) QoQ (%) US 1356.6 80.9 26.4 35.2 1234.5 111.7 -1.3 45.3 532.6 2154.6 26.2 1305.7 136.5 89.8 2175.2 855.1 323.1 Net Sales 2983.2 4.3 20.5 1009.6 Depreciation 63.6 28.4 373.6 73.4 731.5 76.1 -80.1 100.4 Other expenditure 749.7 -2.0 30.5 RM Cost 1120.9 789.5 12.9 27.9 1168.5 South Africa 98.4 1107.9 342.7 2243.6 3078.In the US generics space.2 4404.8 4170.5 3340.2 74.5 3047.7 70.7 202.9 Europe 66.6 1997.4 3177.3 PAT 482.9 68.2 75.8 307.0 1271. a lot of opportunities are panning out in the oral contraceptives and respiratory space.0 657.6 99.3 68.9 794.3 995. pricing pressure due to client consolidation in the US.5 7.9 18.8 104.1 275.4 GPM (%) 62.3 2.4 112.5 57.0 628.4 576.7 885.2 83.2 2.5 831.1 % of Revenue 74.6 0.7 321.8 832.0 22.6 26.3 67.6 OOI 39.0 1028.4 115.9 -245.9 1114.0 26.1 873.4 5.2 20.1 2140.0 600.0 816.2 422.3 30.2 497.2 -5.9 291.9 82.7 1.1 23.9 712.3 291.9 127.2 38. Weakness .1 -4.5 -123.0 24.9 283.6 32.9 1190.0 629.4 17. ICICIdirect. Gavis like costly acquisitions can stretch the balance sheet further if the product pipeline fails to deliver the expected payback.3 28.8 286.0 Minority Interest 7.2 11.3 761.1 2233.3 9.8 2331.8 3069.Increased USFDA scrutiny across the globe regarding cGMP issues.6 1404.1 2678.0 72. Formidable US presence with highest rank among Indian peers in the US generic prescriptions space.0 27.3 106.9 1301.8 13.8 113.1 Interest 4.8 253.7 562.9 1155.1 188.2 33.0 1101.1 1215.6 8.3 107.0 255 -7 Employee Cost 378.9 409.8 157.8 3144.5 26.8 28.0 18.1 3329.4 316.1 19.7 29.7 1031.2 28.8 991.7 559.6 Tax rate (%) 34.7 19.1 33.2 230.5 91.8 1023.9 2294.0 56.Prudent geographical mix covering high opportunity emerging markets as well as developed markets.2 88.8 31.1 2340.0 567.9 881.4 4290.4 158.6 4211.0 Japan 372 321. ICICI Securities Ltd | Retail Equity Research Page 6 .7 57.1 2188.com Research Lupin .0 873.0 EBITDA 773.3 77.0 0.4 128.6 108.1 881.0 19.7 7.0 18.The Japanese market still remains a low margin business.1 75.9 66.1 2121.7 2288. Threats .1 579.2 2.6 % of Revenue 24.1 198.3 39.4 28.6 2226.9 268.5 1271.9 27.0 750.3 71.9 418.9 15.6 708.0 Gross Profit 1901.6 877. pricing probe by the Department of Justice (DoJ) in the US.8 663.4 1069.2 137.1 79.3 EBITDA Margin (%) 25.1 31.4 112.2 28.7 565.7 3181.3 34.5 344.4 88.6 28.5 931.0 791.4 -5.8 38.8 273.9 -60.4 71.8 4.5 546.3 199.9 482.8 662.3 32.0 1308.5 318.3 876.7 4439.8 9.7 107.3 108.4 696.5 Tax 254.2 26.4 265.4 16.1 9.9 3054.8 528.3 0.5 4482.8 746.6 16.9 1242.5 2103.5 29.3 74.2 3156.0 -29.7 4082.8 449.8 159.4 125.5 69.0 3116.9 68.2 81.7 211.7 15.

compared to | 1900 crore in FY17 • For FY18. It also expects gWelchol (CVS) launch to go beyond H2FY18. The company expects large number of control substance approval in FY18 from Gavis ICICI Securities Ltd | Retail Equity Research Page 7 . Lupin completed acquisition of 21 products from Shionogi in Japan • Sales from Japan were impacted during the quarter due to government reforms as the Japanese Government took some benefits away from pharmacies by substituting original manufacturer with generic drugs • Sequential improvement in sales from the US business was due to 1) gGlumetza traction 2) launch of four new products 3) Methergine (gynaecology) ramp up (25% QoQ) and lastly. anti-diabetic) sales grew QoQ on the back of higher market share (75%). anti- diabetic) faced additional competition from Mylan • The management expects high single digit price erosion in the US base business (including Gavis) • The company has filed DPI albuterol (respiratory) in Q2FY17 and expects trials to commence in Q4FY17. Epzicom (antiviral) and Bupropion XL (CVS) • The US branded business was at US$22 million in Q3FY17 against US$18 million in Q3FY16. Gavis alone is targeting ~US$12 billion of this market.| 1300-1400 crore in FY18. Conference call highlights • gGlumetza (Metformin. It also expects to file gMinastrin (oral contraceptive) and gEpzicom (antiviral) ANDA in Q4FY17 • The company expects gRenvela (nephrology) launch in Q4FY18 or Q1FY19. Methergine (obstetric) was the largest product contributing to incremental growth • The management expects 15% growth in domestic formulations from April post normalisation of demonetisation issues • During the quarter. gFortamate (Metformin. the company expects 25+ launches in the US including Minastrin (OC). gAdvair (inhaler) launch in FY18 • Capex guidance . 4) seasonality and cephalosporin contribution • Methergine branded business sales run rate is ~US$50 million • Lupin is targeting US$20 billion worth of control substance market out of an estimated size of US$30 billion.

6 crore. Lupin has 45 FTF ANDAs. Methergine and Methylphenidate. 2016). The company is also fifth largest pharma player in the US (by prescriptions. Cumulative ANDA filings with the USFDA were at 343 with 180 approvals received to date. Generics account for 56% of total pharma volumes. It has launched Ondero (Linagliptin). cardiovascular. The company has delivered a CAGR of 19% in net sales. Japan • About the Japanese market. gastroenterology and injectables segments. EBITDA was at | 3941 crore while net profit was at | 2271 crore in FY16. patent expiries valued at over US$14-16 billion by 2018. two ophthalmic.3% market share and is the eighth largest player in the IPM (IMS MAT March.000 representatives. marking a foray into the high growth Dipeptidyl peptidase-4 (DPP-4) inhibitors segment in the anti- diabetic space • Lupin’s Japan revenue grew 6% YoY to | 1364. the company added 1. including two FTFs. The Japanese government has a target of 80% generic penetration by 2020.2 mg for the prevention and management of postpartum haemorrhage (PPH). 27% in EBITDA and 21% in net profit in the last five years • Lupin is the seventh and the ninth largest generic pharmaceutical company by market cap and sales globally (Bloomberg). Prescriptions for Antara grew 16% YoY and branded Antara revenues increased 14% YoY. Lupin further strengthened its branded play in the US with the launch of two new products. pain and metabolic disorders ICICI Securities Ltd | Retail Equity Research Page 8 . The company received 39 approvals in FY16. immunology. Lupin remains the ninth largest generic pharma player in the Japanese market with a strong presence in the neurology. The company has re- introduced Methergine (methylergonovine maleate) oral tablets 0. contributing 95% of the company’s US sales. The chewable tablet formulations for Suprax grew 66% YoY in prescription terms in FY16.6 crore. The sum total amounts to one of the largest growth opportunities available to Lupin • Lupin has a pipeline of 10 innovative NCE in therapies like CNS. In FY16. translating to an additional 25-30% of overall pharma volumes going generic. 10 dermatology. Japan is the second largest pharma market in the world with sales of over US$115 billion. the third largest Indian Pharma company by revenues and ninth largest generic pharma company in Japan • US revenues were at US$887 million in FY16. The US generics business was at US$841 million. one inhalation and three other products) in FY16. Filed 36 ANDAs (20 oral.7% market share for InspiraChamber anti-static valved holding chamber (VHC) in the US market. It now has 6600+ specialty field forces in domestic market. In addition to this. Methergine is the only FDA-approved oral uterotonic and is a preferred oral agent in management of PPH • Lupin’s India business grew 14% YoY to | 3391. in partnership with Boehringer Ingelheim. The company has garnered 3. which include 25 exclusive FTFs • US branded business contributed 5% of Lupin’s US revenues recording revenues of US$ 46 million. oncology. growing 8%. On key launches. Chronic and semi-chronic therapy segments contribute 87% of Lupin’s overall India revenues. FY16 Annual Report highlights • Net Sales grew to | 13702 crore. IMS Health). The company has 3. The company is developing a new dedicated oral solids manufacturing facility at Tottori.

| 7. 11.6% in FY15). Lupin entered into a strategic co-marketing agreement with Boehringer Ingelheim for co-marketing Linagliptin.8 crore. anti-inflammatory.6 crore • Recommended dividend (including dividend distribution tax) was of | 8.| 19. The portfolio includes 13 fast growing specialty products including key central nervous system products and other specialty products. the largest buyout executed by an Indian pharma company in the US. Brazil marked the company’s foray into the Brazilian market and helped shore up its position in the Latin American market. Managing Director -. a novel Dipeptidyl peptidase-4 (DPP-4) inhibitor in India. Gavis has 58 ANDA filings pending approval with the USFDA and a pipeline of over 65 products under development. R&D spend in FY16 was | 1603. controlled substance products and other high-value and niche generics. Chief Executive Officer -. The company is currently doing Phase III trial for Entanecept in Japan and multiple EU countries. The outlook on the rating is ‘Stable’ • Remuneration of key managerial personnel in FY16. KG.| 44. Lupin’s acquisition of 100% equity stake in Medquímica Indústria Farmacêutica LTDA.7 crore.1 crore on capital expenditure. • On biotechnology. Icra has assigned the rating Icra AAA to the company’s non-convertible debenture programme of | 100 crore. the company launched first time two oncology biosimilars - Lupifil (Filgrastim) and Lupifil-P (Peg-Filgrastim) in India. Vice Chairman-. the DPP-4 Inhibitors market in India is growing at 31% (IMS MAT March 2016). Chairman -. The acquisition enhances Lupin’s scale in the US generics market and also broadens Lupin’s pipeline in dermatology. • Icra has assigned the rating ICRA A1+ (for the company’s short- term credit facilities of | 1310 crore and ICRA AAA for long-term credit facilities of | 190 crore. in the US for US$880 million. anti-virals. The company has completed Phase-I PK/PD trial for two products and pre-clinical studies for two products in India.0 crore. Dr Kamal K Sharma. Lupin’s 200+ strong biotechnology group has developed a pipeline of biosimilars addressing therapies like oncology.9% (vs.1 per share in FY16 with dividend payout ratio of 17. ophthalmology and women’s health. • The company invested | 1168. 19. Lupin’s own fill finish facility is expected to be operational in FY17 • The company has acquired Gavis Pharmaceuticals LLC and Novel Laboratories Inc. In FY16. Vinita Gupta. • Lupin also acquired a specialty product portfolio in Germany from Temmler Pharma GmbH & CO. ICICI Securities Ltd | Retail Equity Research Page 9 .7% of Net Sales. Dr Desh Bandhu Gupta.8 crore. endocrinology.| 25. and Nilesh Gupta. diabetes. rheumatoid arthritis.

ICICIdirect. 12 filings.1 7. EDQM. WHO GMP.com Research ICICI Securities Ltd | Retail Equity Research Page 10 . ANVISA Brazil. Development ongoing 3 2. FL R&D Somerset.1 Respiratory 2 filings. NJ Formulations & R&D Mexico City. UKMHRA. WHO GMP APIs Aug-16 No observations Goa (India) Formulations USFDA. Gavis 9 products in market. Continue development 3. Capsules. ANVISA Brazil Formulations Vadodara (India) APIs WHO GMP Intermediates and APIs Indore (India) Formulations / APIs USFDA. NA 19.Exhibit 10: Major Facilities Inspection Location Segment Regulatory Approvals Type Date Outcome ` Formulations USFDA. 24 filings. TGA Australia. Liquids Jan-16 483 with 3 observations Ankaleshwar (India) APIs UKMHRA.WHO GMP.CVS and Ciphalosporins Feb-16 483 with 4 observations Tarapur (India) APIs USFDA. LRP injectables development Ongoing NA 12.8 Controlled Subst.4 Source: Company. ICICIdirect.3 17.8 Dermatology Gavis 1 product in market.com Research Exhibit 11: Complex Generics/ Speciality Updates Targeted market Size (US$ billion) Focus Areas FY16 R&D Update Filed Development NDDDs Continue development (10 NCEs) NA NA Biosimilars 10 under development. 7 filings. MCC SA Tablets.TGA Auatralia APIs and Formulations Jan-16 483 with 6 observations Nagpur (India) Formulations WHO and USFDA Formulations Kyowa (Japan) Formulations PMDA Orals I' rom (Japan) Formulations PMDA Injectables Vishakapatnam. Clinical trials started for 1 MDI. AP APIs Under Initiation Pune (India) R&D Aug-16 No observations Oldenzaal. TGA Auatralia APIs.8 OC’s 21 products in market. KFDA Intermediates and APIs Mandideep (India) Formulations / APIs USFDA. WHO GMP.7 61. Brazil Formulations & R&D Source: Company.7 Ophthalmology 2 in market. Etanercept started PhIII in Japan.1 1. UKMHRA.2 Injectables Nanomi-complex depot injectable development ongoing.2 NA Total 11. WHO GMP Solid orals Mar-16 Received EIR Jammu (India) Formulations WHO GMP. Netherlands R&D Coral Springs. Mexico Formulations & R&D Minas Gerias. UKMHRA. DPI clinical trials to commence in FY17 0. UKMHRA. Further Development ongoing 4. 10 pending approval 1.

The overall profitability was impacted mainly due to higher R&D. ICICIdirect.3 FY18E 19590 11.2 23.1 20.3 19.8x 19.9 23. with the Goa EIR (Indore earlier).6 10.com Research ICICI Securities Ltd | Retail Equity Research Page 11 . the company is well poised to address the pricing issue.8 83.9% Premium 35 30 25 (x) 20 15 10 5 0 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Lupin CNX Pharma Source: Company.2x 4.7 18. It expects the trend to continue. We remain upbeat about future prospects and maintain BUY with a target price of | 1890 based on 22xFY19E EPS of | 85.4 -5.8 14.1x [ Source: Company. a major overhang has been neutralised and the company can focus on the launches at a regular interval.8 FY19E 22095 12. ICICIdirect.3x 9.1 17.5 29.9 Source: Company.3 62. ICICIdirect. India and Japan are likely to complement the US driven growth.3 50.9 13.8 24.4 23.com Research Exhibit 14: Valuation Revenues Growth EPS Growth P/E EV/EBITDA RoNW RoCE (| crore) (%) (|) (%) (x) (X) (%) (%) FY16 14209 11.6 21.4 19. Exhibit 12: One year forward PE 2500 2000 1500 1000 500 0 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Price 29. CNX Pharma 45 40 3.5 20. Ramp up at Gavis is also likely to support launches.2 20.5 8.com Research Exhibit 13: One year forward PE of company vs. With one of the strongest pending pipelines in the US (142 pending approvals) at its disposal.9 21.0 67.6 FY17E 17654 24.4x 21. The management is now guiding for 30+ launches annually in the US in FY18. gGlumetza/gFortamate traction. going ahead. Valuation Q2 numbers demonstrated strong gross margins and robust US growth mainly due to Gavis consolidation. forex loss and new recruitments/capex at Gavis. However.8 19.7.

5 53.2 53.7 2 Rahas Investments Pvt. 19.76 7.3m 0. distribute and market Alinia (nitazoxanide) oral suspension brand in the US market Sep-13 Signs agreement with US based Onset Dermatologics to market Locoid lotion to paediatricians in the US market Feb-14 Acquires Dutch firm Nanomi B.41 15.04 40.9m Reliance Nippon Life Asset Management Limited -8.1m 0.500 50.2m -0.8m 1.21 46.9m Capital International Investors 20.0 1. ICICIdirect.9m Lupin International Pvt.9m 0.3 3 Visiomed Investments Pvt. 40.1m 0.2m 0.0 10.500 90. -7.0m 8 Jhunjhunwala (Rakesh Radheshyam) 31-Dec-16 1. Ltd. foraying into the technology intensive complex injectables space.0m 5 Lupin Investments Pvt.0 (|) (%) 40. Ltd.7m 0. ICICIdirect.8 46.com Research Recent Activity Buys Sells Investor name Value ($) Shares Investor name Value ($) Shares Rahas Mercantile Pvt.8 46.5m 10 Capital World Investors 31-Dec-16 1. 18.6m 9 GIC Private Limited 31-Dec-16 1. Morgan Asset Management (Hong Kong) Ltd.5 46. Mar-14 Acquires Mexico-based ophthalmic drugs maker Laboratories Grin Apr-15 Consolidated Pharma Dynamics business in South Africa May-15 Lupin acquires Brazil's Medquimica Industria Farmaceutica SA  Jul-15 Lupin's Goa facility recieves nine Form 483 observations Jul-15 Lupin acquires Gavis Pharmaceuticals for US$ 880 million to strengthen its US portfolio Jul-15 Closes Temmler acquisition in Germany Mar-16 Completes Gavis acquisition Jul-16 Goa facility receives establishment inspection report (EIR) from USFDA for July 2015 inspectation Nov-16 Goa facility receives establishment inspection report (EIR) from USFDA for March 2016 inspectation Source: Company.3m 0.5m J.com Research Top 10 Shareholders Shareholding Pattern Rank Investor Name Latest Filing Date % O/S Position Position Chan (in %) Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 1 Zyma Laboratories. 31-Dec-16 9.0m Others 53.V. Ltd.7m 0.77 44.0m 6 Stewart Investors 30-Nov-16 2.0m 4 Lupin Marketing Pvt.43 11.000 30. Ltd.3m -0.0m Promoter 46.8m -1. 31-Dec-16 10.5 53.0m Source: Reuters. -40.7m 0.7m -0.4m Capital International.4m Abu Dhabi Investment Authority 13.33 55.4m 0.0 500 20.0m 7 National Westminster Bank Plc 31-Dec-16 2. Consensus 2. ICICIdirect. Inc. 31-Dec-16 9.8m Aberdeen Asset Management (Asia) Ltd. 31-Dec-16 3.9m Baillie Gifford & Co.Recommendation history vs.6m Raiffeisen Kapitalanlage-Gesellschaft mbH -5.5 46.2m Source: Reuters.2 53. Company.0m 0.2m 0. which provides exclusive rights to Lupin to promote.0 2.84 8. Ltd.P.7m -0. Ltd.000 70. for an undisclosed amount.0 60.0 80.0 0 0. Ltd.com Research ICICI Securities Ltd | Retail Equity Research Page 12 .8m 0.0 1.0 Jan-15 Mar-15 Jun-15 Aug-15 Oct-15 Jan-16 Mar-16 Jun-16 Aug-16 Nov-16 Jan-17 Price Idirect target Consensus Target Mean % Consensus with BUY Source: Reuters.9m 0.49 11. -10.75 7.com Research Key events Date Event Sep-11 Receives USFDA approval for its first oral contraceptive drug norethindrone tablets Nov-11 Japanese subsidiary Kyowa acquires specialty injectables company I’rom Pharmaceutical Nov-12 Launches Fenofibrate 48 mg and 145 mg strengths (generic Tricor) in the US Aug-13 Signs an agreement with Romark Laboratories. ICICIdirect. 31-Dec-16 12.

7 605.4 2. ICICI Securities Ltd | Retail Equity Research Page 13 .0 70.9 -1884.148.5 935.8 3041.122.com Research Source: Company.082.2 1.0 71.3 4.0 0.6 1.1 115.119.1 24.4 62.691.013.9 2.270.5 493.770.9 13.944.3 EV / EBITDA 19.8 2.4 -1000.5 -1066.3 -118.9 Debt / Equity 0.507.813.3 24.4 Inc / (Dec) in Loan Funds 6582.7 555.876.8 16.9 4.3 8.2 67.1 Interest 44.837.4 2.4 (Inc)/Dec in Investments 1653.1 5.9 1.3 Market Cap / Sales 4.3 26.2 Gross Block 10.8 3.7 Valuation Ratios (x) Cash 837.4 11.6 Debt / EBITDA 1.com Research .796.8 Depreciation 463.2 12.8 15.0 PAT before MI 2.4 Current Ratio 2.762.347.736.4 4.5 Total Fixed Assets 8.0 0.8 21.007.6 503.8 4.9 4.416.4 5.518.3 15.9 15.7 0.5 304.041.3 3.7 RoE 20.8 CF from Operating Activities -116.0 4.399.3 EBITDA margin 26.796.1 3.2 67.5 EPS (Adjusted) 50.6 5.048.833.036.2 Raw Material Expenses 4.6 144.4 3.155.0 -2000.436.8 Total Shareholders funds 10.0 68.566.127.8 Solvency Ratios Deferred Tax Assets 80.6 Minority Interest 8.2 22.3 -2384.3 9.4 191.6 Source: Company.046.4 75.0 Total Current Liabilities 3.1 107.0 -500.2 Other expenditure 4.077.654.7 CF from Financing Activities 6130.9 6.641.964.309.4 13.5 P/E 29.4 13.589.744.4 Return Ratio (%) Inventory 3.3 1.8 3.4 20.1 154.5 55. ICICIdirect.9 597.0 Depreciation 463.3 11.0 Growth (%) 3.3 Long term Loans and advances 970.360.5 8.139.7 1.181.3 118.6 -144.6 80.4 276.691.5 1.7 3.4 3.0 8.9 5.888.6 11.0 Operating Ratios (%) Other NCL & LT Provisions 455.637.8 3.0 2.8 6.0 -2635.com Research Balance sheet | Crore Key ratios (Year-end March) FY16 FY17E FY18E FY19E (Year-end March) FY16 FY17E FY18E FY19E Equity Capital 90.834.7 3.4 351.1 115.4 18.552.964.531.046.956.0 PBT 3.9 4983.3 Profit/(Loss) after taxation 2270.563.5 2.1 5.5 55.733.0 Net Block 8.7 585.5 855.8 70.2 Inventory Days 81.988.0 Source: Company.9 1.5 254.0 -2709.6 80.9 -1500.964.5 9. ICICIdirect.719.4 10.0 Creditor Days 56.5 17.208.8 5.9 Provisions & Other CL 1.9 24.922.4 20.1 1.8 295.774.106.8 Creditors 2.8 0.744.8 3.6 14.058.8 9.2 EV / Net Sales 5.135.9 1.6 8.300.6 20.4 -2000.944.1 Other operating Activities 44.782.684.2 Net Cash Flow 357 579 -864 146 Adjusted PAT 2.554.Financial summary Profit and loss statement | Crore Cash flow statement | Crore (Year-end March) FY16 FY17E FY18E FY19E (Year-end March) FY16 FY17E FY18E FY19E Total Operating Income 14.5 2.1 Application of Funds 18.8 -2020.9 17.8 241.1 5.475.646.178.5 14.0 1.9 Inc/ (dec) in Current Liabilities 347.9 23.5 Price to Book Value 6.5 935.1 Total Operating Expenditure 10.4 62.1 398.0 1.3 3.5 14.7 21.088.5 23.4 1.0 10.0 Employee Expenses 2.046.0 EO 0. ICICIdirect.7 505.8 Inc / (Dec) in Equity Capital 0.153.279.422.4 8.0 28.5 855.7 27.7 2.587.2 1.7 22.0 12.4 PAT Margin 16.7 2801.0 19.0 0.967.1 19.9 Debtors 4.1 4.2 3.368.5 1.795.2 979.0 946.9 -1384.7 2.2 Deferred Tax Liability 204.5 2.7 552.4 25.0 0.4 2.9 75.4 Capital WIP 546.com Research Source: Company.9 216.801.5 Opening Cash 481 838 1.0 CF from Investing Activities -5657.979.7 Gross Margin 69.6 80.6 0.5 Goodwill on Consolidation 2.1 72.1 6.5 2.7 3655.9 15.0 946.9 1.5 Cash per Share 18.0 -500.3 118.2 Other Current Assets 473.0 5.1 Other Financing Activities -44.036.3 5.9 Other Income 207.6 144. ICICIdirect.8 23.8 115.5 Minority Interest 32.6 RoCE 18.4 75.7 2.1 19.6 31.4 12.0 2.095.107.1 3.877.549.5 Growth (%) 11.782.9 Loans and Advances 737.0 -837.8 Free Cash flow -5.0 15.984.2 Other Investing Activities -1505.7 399.0 -1000.291.238.424.2 5.4 0.5 83.0 10.175.6 Total Current Assets 9.964.5 6.4 698.012.416.5 2.6 EBITDA 3.5 5.9 3.9 Dividend per share 9.9 3.5 17.1 Accumulated Depreciation 2.9 RoIC 18.3 20.092.5 83.896.654.1 4.9 3.0 889.6 24.807.3 23.7 5.184.2 22.3 BV per share 243.2 19.1 Closing Cash 837.0 1.999.0 4.2 19.719.638.639.1 90.5 354.983.2 -1399.5 485.7 552.8 (inc)/dec in Current Assets -3243.4 12.894.2 0.7 70.6 3.1 90.9 1.3 5.2 3.4 698.309.0 Total Debt 7.3 55.507.5 Purchase of Fixed Assets -5805.0 0.5 Total Liabilities 18.1 Per Share data (|) Reserve and Surplus 10.7 8.4 483.433.1 Debtor Days 116.1 839.719.0 0.1 90.046.8 6.658.9 19.388.240.0 71.1 Reported EPS 50.4 3.651.2 788.3 13.0 -68.219.417 552 Gwoth (%) -5.7 4240.2 3.0 Investments 7.191.5 EBITDA conversion Rate -3.0 -1500.7 71.1 Asset Turnover 0.2 979.6 70.777.3 18.450.0 68.7 3.5 Net Current Assets 6.0 Dividend and dividend tax -407 -476 -517 -642 Total Tax 1.6 3774.5 421.401.988.0 9.2 0.0 7.

7 16.0 48.0 19.2 22.4 19.3 21.0 54.6 18.0 13.6 20.7 23.0 22.7 66.8 38.0 11.3 12.2 27.6 19.9 Natco Pharma NATPHA 759 750 Buy 13230.1 14.1 24.2 18.4 62.120 Buy 21715.1 20.0 30.9 15.100 Buy 40084.7 28.7 34.3 7.1 24.3 20.3 285 Hold 2455.5 17.6 11.2 58.5 22.4 13.3 24.9 18.5 11.6 Alembic Pharma ALEMPHA 558 615 Hold 10509.0 16.1 19.3 13.4 16.9 31.9 67.7 22.com coverage universe (Healthcare) Company I-Direct CMP TP Rating M Cap EPS (|) PE(x) RoCE (%) RoE (%) Code (|) (|) (| Cr) FY16 FY17E FY18E FY19E FY16 FY17E FY18E FY19E FY16 FY17E FY18E FY19E FY16 FY17E FY18E FY19E Ajanta Pharma AJAPHA 1796 1.0 11.8 13.0 14.5 114.2 63.2 18.2 26.7 14.9 41.9 28.3 59.8 5.0 10. SYNINT 519 570 Hold 10374.8 21.5 15.2 21.8 20.4 33.5 24.2 10.1 18.8 18.2 18.3 55.1 22.7 14.9 33.0 37.9 575 Hold 46889.9 21.2 40.4 18.4 15.5 23.7 16.6 18.0 23.4 17.5 28.9 23.0 13.1 21.2 16.8 23.8 55.5 15.4 60.6 14.5 16.0 Divi's Lab DIVLAB 760 925 Buy 20165.7 33.7 27.1 23.8 9.6 51.890 Buy 66695.5 25.com Research ICICI Securities Ltd | Retail Equity Research Page 14 .8 23.0 22.3 315 Buy 2508.8 Indoco Remedies INDREM 272.2 17.1 14.5 17.9 35.5 24.6 14.1 17.9 20.1 30.3 15.475 Buy 21135.6 Source: Company.7 13.2 15.9 12.8 44.0 14.1 13.6 Aurobindo Pharma AURPHA 685 1.1 16.2 67.0 23.5 21.5 26.6 15.6 18.7 14.3 Unichem Lab UNILAB 270.9 15.5 23.8 42.2 77.440 Buy 17168.5 16.7 45.7 18.2 17.2 10.2 51.6 10.4 Cadila Healthcare CADHEA 364 380 Hold 37294.7 12.9 20.1 20.3 20.8 26.2 33.4 32.7 21.3 12.8 12.9 12.3 26.4 30.5 83.1 27.1 19.7 20.2 Ipca Laboratories IPCLAB 530 605 Buy 6690.4 14.6 12.4 45.6 17.6 14.1 28.3 13.9 9.5 15.5 12.1 46.8 18.2 17.5 21.5 29.5 30.2 34.9 31.4 59.9 13.8 24.1 32.4 11.4 44.9 20.2 16.0 13.5 51.9 39.1 28.2 20.8 14.6 50.1 15.8 Glenmark Pharma GLEPHA 952 1.6 22.5 53.0 21.4 Lupin LUPIN 1478 1.6 56.8 11.6 34.2 18.9 20.1 32.9 17.8 29.0 26.7 15.6 39.5 10.1 810 Buy 11293.7 20.4 25.3 13.3 8.8 31.0 23.8 21.5 17.0 Cipla CIPLA 582.3 39.8 18.0 89.4 Torrent Pharma TORPHA 1249 1.5 7.1 Sun Pharma SUNPHA 659 850 Buy 158155.2 46.7 31. ICICIdirect.4 32.0 28.8 44.7 21.1 33.3 23.0 50.1 25.4 13.0 20.3 52.1 25.7 13.5 Biocon BIOCON 1086 1.3 14.9 15.5 27.9 21.8 21.3 20.0 8.5 30.9 14.9 13.930 Hold 49548.155 Buy 26868.7 11.2 20.8 26.6 18.4 19.2 20.0 15.2 17.4 74.4 20.0 14.0 23.8 23.1 26.3 39.2 20.5 16.7 62.9 5.9 18.3 8.3 36.2 19.2 Syngene Int.3 31.1 107.4 53.9 Apollo Hospitals APOHOS 1234 1.2 8.7 21.ICICIdirect.9 23.9 17.8 29.9 14.9 8.8 57.7 Dr Reddy's Labs DRREDD 2991 2.1 19.0 19.5 32.3 75.8 Jubilant Life JUBLIF 709.9 11.0 11.2 29.960 Buy 15801.4 8.7 141.4 22.7 19.5 12.5 9.0 18.8 18.3 19.1 15.9 24.0 24.3 24.7 9.8 11.0 41.6 20.2 10.6 25.6 15.1 10.7 13.1 54.5 154.

ICICIdirect. 1st Floor.com Research Desk. Road No 7. Hold: Up to +/-10%.com assigns ratings to its stocks according to their notional target price vs. Strong Buy: >15%/20% for large caps/midcaps. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. with high conviction. current market price and then categorises them as Strong Buy.RATING RATIONALE ICICIdirect. Sell: -10% or more. ICICI Securities Limited. Buy.pandey@icicisecurities. Andheri (East) Mumbai – 400 093 research@icicidirect. respectively. MIDC.com ICICIdirect.com endeavours to provide objective opinions and recommendations. respectively. Hold and Sell. Pankaj Pandey Head – Research pankaj. Buy: >10%/15% for large caps/midcaps.com ICICI Securities Ltd | Retail Equity Research Page 15 . Akruti Trade Centre.

This may not be taken in substitution for the exercise of independent judgment by any recipient. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way. We also certify that no part of our compensation was. compliance or other reasons that may prevent ICICI Securities from doing so. Compensation of our Research Analysts is not based on any specific merchant banking. director or employee of the companies mentioned in the report. corporate finance. country or other jurisdiction. persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. where such distribution. Past performance is not necessarily a guide to future performance. 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