Jason Gale, Bloomberg
Singapore: Lupin Ltd shares rose to a record after UBS Securities India Pte Ltd rated the stock “buy” in new coverage and said the Indian drugmaker may make acquisitions to achieve a $1 billion (Rs4,212 crore) sales target.
Mumbai-based Lupin, which had revenue of $385 million in the year ended March 2006, aims to reach the target by 2010, analysts Anand Agarwal and Prashant Vaishampayan wrote in a report dated 13 April. “Lupin will need inorganic growth to achieve it,” they said.
Shares of Lupin, which makes antibiotics and generic drugs for tuberculosis and heart disease, rose as much as Rs28.3, or 4.5%, to Rs659.85 on the Bombay Stock Exchange. They traded 3.1% higher at Rs651 at 12:43 pm local time and have gained 6.2% this year. The stock may reach Rs770 within 12 months, Agarwal and Vaishampayan said.
Global sales of lower-cost drug copies may rise as much as 14% to $65 billion this year, according to an annual report released in October by research firm IMS Health Inc.
Lupin’s sales may reach Rs24.75 billion ($582 million) in the year ending March 2008, from Rs19.86 billion a year earlier, the analysts said.
The drugmaker will increase the amount of profit it makes from every rupee of sales as it expands in rural areas of India, they said. “In international markets, Lupin’s growth will come from the U.S., Europe and emerging markets such as Russia, Africa and Asia,” the analysts wrote.
Ten analysts advise investors buy Lupin’s shares and two have “hold” ratings on the stock, according to data compiled by Bloomberg of recommendations made this year.