LUPIN - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Quick Take: Lupin shows strong fundamentals with low debt, high ROCE/ROE, and attractive PEG ratio. Current valuation is below industry average, suggesting an entry zone around ₹1,950–2,050 for long-term compounding.

Fundamental Rating: 4.6

• 📈 Revenue Growth: 12.9% YoY, strong expansion in FY2025
• 💰 Profit Margins: EBITDA margin at 24.7%, improved from 20%
• ⚖️ Debt Ratio: Debt-to-equity at 0.04, very low leverage
• 💵 Cash Flows: Healthy PAT of ₹33,063 Cr FY2025
• 📊 ROE: 17.8%, ROCE: 21.9% — efficient capital use
• 📉 Valuation: P/E 18.2 vs Industry PE 30.6, undervalued
• 📚 Book Value: ₹596, P/B ~3.56
• 📈 PEG Ratio: 0.11, strong growth at reasonable price
• 🏥 Business Model: Diversified pharma portfolio, strong generics & biosimilars pipeline
• 🛡️ Competitive Advantage: Global presence, FDA-compliant facilities, licensing deals

Positive

• ✅ Strong revenue and profit growth
• ✅ Low debt, high ROCE/ROE
• ✅ PEG ratio indicates undervaluation
• ✅ Recent FDA clearance and licensing agreements

Limitation

• ⚠️ Quarterly PAT dropped from ₹2,128 Cr to ₹869 Cr
• ⚠️ FII holding reduced by 0.75%
• ⚠️ Dividend yield remains low at 0.57%

Company Negative News

• 📉 QoQ PAT decline of 8.9%

Company Positive News

• 🌍 Licensing deal for Ranibizumab biosimilar
• 🏥 FDA EIR clearance for Nagpur injectables facility
• 💡 Expansion into gastroenterology markets in Philippines & Brazil

Industry

• 💊 Pharma industry PE at 30.6, Lupin trades at discount
• 📈 Strong demand for generics and biosimilars globally

Conclusion

Lupin demonstrates robust fundamentals with strong profitability, low debt, and undervaluation compared to peers. Entry zone recommended around ₹1,950–2,050 (near DMA 200 and 50). Long-term holding is favorable given global expansion, biosimilar pipeline, and improving margins.

Sources

Lupin

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Would you like me to also prepare a basket overlay with peer benchmarking so you can compare Lupin against other pharma stocks, or should we focus on sector rotation opportunities for diversified compounding?