Angel Broking has an Accumulate rating on Lupin Labs with a target price of Rs 1,290.
A report released on September 29 said: “Lupin has completed the acquisition of Antara rights in the US from Oscient Pharmaceutical for US $38.6mn at 0.6x its CY2008 sales, which would be funded through internal accruals. This is the second branded product acquisition by Lupin in the US in FY2010, following the Allernaze acquisition in June 2009.
We expect the deal to be EPS-accretive in the first year of acquisition, and estimate that the product will partially compensate for the fall in revenue from Suprax in FY2011E, when the generic competition kicks-in.
“After the acquisition, we have changed our sales estimates for FY2010E and FY2011E by 5-6%, and our earnings estimates by 7-8%. We expect the stock to be a strong re-rating candidate among our pharma coverage universe, once the Mandideep issue gets resolved. On the valuation front, the stock is trading at 14.9x its FY2010E earnings and at 13.3x its FY2011E earnings.
We recommend an Accumulate rating on the stock, with a Target Price of Rs1,290 (Rs1,112).”
Source: UTVI
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