Pharmaceutical major Lupin has been downgraded to an “Add” rating from “Buy” by analysts, despite delivering another quarter of earnings that surpassed market expectations. The brokerage has set a target price of ₹2,500 for March 2027, citing concerns that future earnings growth may moderate after a strong run.
The company reported its highest-ever quarterly sales in the US market during the fourth quarter of FY26, driven by strong demand for products such as Mirabegron and Tolvaptan. US sales stood at USD 371 million, beating estimates, while India business growth remained steady with the core prescription segment rising 14.5% year-on-year.
Lupin’s gross margin expanded sharply by nearly 500 basis points to around 75%, while EBITDA margin came in at approximately 29%, helped by stronger product mix and lower research spending. Analysts said FY27 profitability could exceed management’s guidance of around 25%.
However, the brokerage noted that much of the near-term earnings optimism may already be reflected in the stock price. It expects Lupin’s FY28 earnings per share to remain largely flat compared to FY27, even under optimistic assumptions.
The report highlighted that several high-value launches in the US market — including Xywav, Ellipta, Respimat, Aflibercept, Etanercept and Symbicort — are likely to contribute meaningfully only after FY28.
Management expects high single-digit revenue growth in FY27 and sees further room for generic penetration in key products such as Tolvaptan and Mirabegron. The company is also betting on biosimilars, with Pegfilgrastim expected to scale up from the second half of FY27.
Lupin further said it is exploring acquisitions in ophthalmology, pulmonology and rare neurological diseases, while its European arm VISUfarma is expected to support expansion in markets such as Italy and Spain.
