ICICI Securities has reaffirmed its BUY rating on Lupin Ltd, setting a target price of Rs 2,275, reflecting a 15% upside from the current market price of Rs 1,975. The brokerage’s optimism stems from strong U.S. performance driven by niche launches under exclusivity, rising EBITDA margins, and a well-laid complex generics and biosimilars pipeline extending to FY30. While FY27 may see a temporary slowdown as key exclusivity products fade, Lupin’s robust R&D investments and diversification across markets suggest sustained long-term growth potential.

Robust Q2FY26 Performance: U.S. Leads the Surge

Lupin reported an impressive 24% YoY revenue growth in Q2FY26, clocking Rs 6,831 crore, led by the U.S. market, which grew 40% YoY to Rs 2,762 crore. Other geographies also contributed positively—emerging markets surged 45%, and developed markets advanced 19%, while the India segment grew modestly at 3.4% due to lower institutional sales.
The API business, however, declined 12.8% to Rs 256.8 crore.

EBITDA rose 63% YoY to Rs 2,138 crore, expanding margins by 706 basis points to 30%, primarily due to improved gross profit margins (74.1% vs. 70.2%). The quarter reflected Lupin’s operational efficiency, driven by U.S. launches such as gMyrbetriq, gTolvaptan, and gSpiriva under exclusivity, along with tight cost control.

Operational Highlights: Market Expansion and Key Launches

The company has strengthened its position as the third-largest generic player in the U.S. by prescriptions, holding leadership in 49 products and top-three positions in 113 formulations.
Lupin’s geographic revenue split for Q2FY26 stands as follows:

These numbers underscore the company’s growing reliance on its U.S. business while highlighting the strategic need for product diversification to mitigate concentration risk.

Margins Recover to Multi-Year Highs

Lupin has successfully regained EBITDA margins above 20%—a level not sustained since FY17—driven by cost optimization, improved product mix, and sustained control over expenses.
Management expects FY26 EBITDA margins at 25–26%, slightly improving from earlier guidance, while FY27 margins are projected at 24–25%. The trajectory reflects operational discipline and pricing leverage in complex generics, especially in the U.S. segment.

Conference Call Takeaways: U.S. Strategy and Pipeline Momentum

gTolvaptan, a key Q2 contributor, may face competition soon, but management foresees limited new entrants in the near term.

gMyrbetriq continues steady growth, with litigation outcomes pending and no immediate competitive threats.

gRisperdal is set to launch in the coming weeks, sharing exclusivity with Amneal.

Liraglutide has been launched, while development of Semaglutide and Tirzepatide is underway. Lupin is also building in-house peptide capacity, currently relying on CMOs.

The company expects to maintain a quarterly U.S. run-rate of $275–300 million, aiming to close FY26 at $1 billion in revenue.

India business is forecast to grow 1.2–1.3x the IPM rate, supported by 10 new product launches in H1FY26 and another 10 planned for H2FY26.

R&D and Biosimilar Expansion: The Next Growth Frontier

Lupin continues to invest heavily in innovation, with an R&D spend of 7.5–8.5% of revenues.
Key developments include:

Plans to launch five biosimilars in developed markets by FY30.

Expected USFDA approval for Pegfilgrastim in FY26, followed by Ranibizumab in FY27 and Eylea in FY28–29.

Acquisition of VISUfarma (EV €190 million) will expand Lupin’s ophthalmology portfolio across Europe, covering Italy, Spain, Germany, France, and the UK.

These moves will significantly strengthen Lupin’s non-U.S. presence and enhance its biosimilar revenue base.

Financial Performance Snapshot

Valuation and Recommendation

The stock is valued at Rs 2,275 per share, applying a 16x EV/EBITDA multiple on FY27E EBITDA of Rs 6,629 crore.
At current levels, it trades at 19.5x FY26E P/E and 13.4x EV/EBITDA, offering attractive risk-reward amid strong margin recovery and diversified R&D initiatives.

The outlook remains positive, emphasizing Lupin’s ability to sustain growth through complex generics, biosimilars, and new product launches across the U.S. and international markets.

Key Risks to Watch

USFDA compliance issues: Legacy cGMP concerns remain a critical overhang.

U.S. product concentration: Heavy reliance on top-performing products increases volatility.

Pricing pressure: Any further erosion in U.S. generics pricing could weigh on margins.

ICICI Securities' View: A Balanced Play Between Innovation and Execution

Lupin’s transformation from a traditional generics company to a complex generics and biosimilars player is visibly taking shape. The company’s strategic emphasis on peptides, respiratory, and ophthalmology portfolios positions it for sustainable mid-term growth. However, FY27 may test resilience as exclusivity products normalize and competitive intensity rises.