Should You Invest in Lupin? | CORPORATE ETHOS

Should You Invest in Lupin?

By: | January 17, 2018

Jan 15: Pharma major, Lupin Ltd (BSE:500257, NSE: LUPIN)  has been in the news recently for its foray into OTC segment with the launch of its Softovac brand, a bowel regulator made with natural ingredients. It also announced receiving the USFDA final approval for its Oseltamivir Phosphate Capsules.

However, the larger news from the investor perspective was the billionaire investor Rakesh Jhunjunwala raising his stakes in the scrip to the highest ever in the December quarter by cutting his stakes in some other important scrips such as Rallis India.

There are a couple of reasons why one should closely follow Lupin and also the pharma sector in general. Rakesh Jhunjhunwala has raised his stake in pharma sector by 77.42% and the share of the sector in his portfolio is 61.66%, according to research analyst agency NIveza.

In the September quarter, the net profit had fallen 31.29% to Rs 455.01 cr while net sales fell 8% to Rs 3,874.16 cr. Earnings per share has fallen to Rs 10.04. On short to medium term basis, it has been under performing the industry average and also Nifty. Lupin fares well on return on equity at 18.94% and assets of 10.45% while net profit margin of 14.61% is also attractive. Liquidity and cash flow ratios fail to impress, an analyst said.

It is trading at a Price Earnings Ratio (PE) of 19 which gives room for further uptrend while MACD line has witnessed a bullish crossover signalling a buy, while Average Directional Index (ADX) of 22 indicates range bound trading. RSI of 61.08 indicates bullishness.

On Wednesday morning trade, Lupin rose to a high of 913 before falling to 911.40, a gain of 0.57% as against previous close of 906.20.