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Business News/ Markets / Stock Markets/  Rakesh Jhunjhunwala-owned pharma stock falls 7% post Q1 results. Should you buy at current levels?
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Rakesh Jhunjhunwala-owned pharma stock falls 7% post Q1 results. Should you buy at current levels?

Lupin Q1 consolidated net profit significantly jumped to ₹542 crore for the quarter ended June 30, 2021

Lupin shares plunged nearly 7% Premium
Lupin shares plunged nearly 7%

Shares of Lupin declined nearly 7% to 1,043 per share on the BSE in Wednesday's first half of the session despite reporting a significant jump in its June quarter consolidated net profit, however, missed market expectations. Drug firm Lupin reported a 5-fold jump in its consolidated net profit at 542.46 crore for the quarter ended June 30, 2021. The company had posted a net profit of 106.9 crore for the corresponding period of the previous fiscal.

The significant jump in June quarter net profit was on account of robust sales and income received from biopharmaceutical firm Boehringer Ingelheim for achieving key milestones for its novel MEK inhibitor compound collaboration.

''Lupin has reported good growth in topline as well as bottom line, but below the market expectations as Q1FY21 was the low base for the company due to covid related disruptions. Company has reported a dip in gross profit margins from 65% to 63.9% QoQ. Domestic market has done well for the company, domestic market sales were up by 27.3% YoY and 27.2% QoQ. We expect the domestic market to continue its momentum for the next couple of quarters. We have a neutral outlook on Lupin Limited,'' Yash Gupta Equity Research Associate, Angel Broking said.

Speaking on Lupin share price outlook; Mudit Goel, Senior Research Analyst at SMC Global Securities said, “Lupin shares have strong support at 1020 and it is expected to remain intact. My suggestion is to buy Lupin at current price maintaining stop loss below 1020. The stock may bounce back strongly and hit 1130 in next one week trade session. The stock may give a breakout above 1100 levels. So, in case, the stock sustains above 1100 levels, one can hold the counter further maintaining trailing stop loss at 1060."

Lupin's revenue from operations stood at 4,237.39 crore from 3,468.63 crore for the same period a year ago. "While the quarter's profits were bolstered by the Boehringer Ingelheim MEK program income, despite a tough operating environment, we see substantial room for growth," Lupin Managing Director (MD) Nilesh Gupta said.

Lupin sees meaningful uplift in the second half and remains focused on its journey of expanding margins through driving strong double-digit revenue growth and optimising costs, while ensuring the safety of its people and the highest standards of compliance, Gupta added.

Indian ace investor Rakesh Jhunjhunwala holds 1.60% stake or 72,45,605 shares in Lupin as of June quarter, BSE shareholding data showed.

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Published: 11 Aug 2021, 12:51 PM IST
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