Rakesh Jhunjhunwala stock: Lupin shares hit new 52-week low; down over 10% in 2 sessions

Rakesh Jhunjhunwala–backed Lupin shares touched a new 52-week low to Rs 806.05 per share, slipping by 7.5 per cent on the BSE on the intraday basis on Monday. This was on the back of muted third quarter results released on February 3, 2022. 

In the last two trading sessions, the stock has declined almost 10.5 per cent from Rs 900.04 a piece. The counter is trading at its lowest level since May 2020. It has dropped almost 30 per cent in the last six months, as compared to a 7 per cent rise in the S&P BSE Sensex. 

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Ace investor Rakesh Jhunjhunwala has reduced his stakes in the company below 1 per cent during the September quarter, as the name of the investor disappeared from the September shareholding pattern of the company available on the BSE. 

The global brokerage firm Jefferies maintain an Underperform stance on Lupin and reduces the target price to Rs 737 from Rs 825 per share. It said, In-line revenue driven by US beat, but still reported an EBITDA miss of 14per cent with EBITDA margins at 13.6 per cent.  

The brokerage said, the company’s management guided to continued pain for next few quarters and cut FY23/FY24 EPS estimates by 15/4 per cent. 

The pharma major had reported lower-than-expected margins and net profit in October-December quarter of the financial year 2021-22 (Q3FY22) on the back of one-time expenses related to residual metformin returns and provision for aged stock returns of Oseltamivir. 

In Q3FY22, the drugmaker’s EBITDA (earnings before interest tax and depreciation and amortization) margins dipped by 580 basis points (bps) sequentially, 1,050 bps year-on-year (YoY) to 9.9 per cent.   

Similarly, the EBITDA of the company more-than-halved, tumbling over 68.2 per cent YoY to Rs 1,671 crore. It said that excluding one-time expenses of Rs 193 crore, Q3FY22 EBIDTA margin was 14.6 per cent and PBT (profit before tax) was Rs 360 crore.  

On the contrary, the pharma major’s sales jumped marginally by 3.6 per cent YoY to Rs 4,161 crore wherein domestic formulations grew 7.8 per cent YoY to Rs 1,473 crore.