InvestorQ : Is there a turnaround in Lupin and does it mean I can buy pharma stocks?
Rutuja Nigam made post

Is there a turnaround in Lupin and does it mean I can buy pharma stocks?

Answer
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Arti Chavan answered.
1 year ago


There is a good deal of buying interesting coming into pharma due to the defensive nature. Most investors are getting a little wary of the high beta names in banking and auto due to a demand slowdown. This had resulted in a rise in demand for pharma stocks.

Since you asked about Lupin, the company had a very good last quarter. It reported a 50% jump in net profits to Rs.303 crore in the June quarter even as revenues for the quarter were up by 15% at Rs.4418 crore. On a YOY basis, the North American sales of Lupin were up by 30% and that largely contributed to the growth in profits of Lupin. This is significant because North America accounts for nearly 35% of the total sales of Lupin. This is one of the few pharma companies with a strong India franchise with 30% of its revenues coming from India. The India business also saw a growth of 10% in the quarter.

Pharma stocks have been depressed for some time and this is the right time to buy stocks like Lupin in the pharma space. Of course, you need to take a long term perspective of at least 2 years to be profitable in such counters.