Lupin has posted a strong Q4FY25 led by momentum in its US portfolio, with ICICI Securities reaffirming a HOLD recommendation and a target price of Rs 2,110, indicating limited upside from the current market price of Rs 1,968. Growth in the U.S. and other developed markets drove the topline, while gains in operating margins lifted bottom-line performance. However, with the impending loss of exclusivity on key drugs and limited visibility in new high-margin launches beyond H1FY26, investor sentiment is expected to remain cautious. Strategic biosimilar entries and U.S. acquisitions may reshape long-term narratives.

Quarterly Performance: U.S. Surge Powers a 14.2% Revenue Jump

Lupin reported Q4FY25 revenue of Rs 56,671 million, marking a 14.2% YoY growth, primarily propelled by strong performance in the U.S. and developed markets. The gross margin improved by 197bps to 70.2%, driven by limited competition products and favorable raw material costs. Key quarterly metrics include:

EBITDA grew 29.6% YoY to Rs 12,921 million with a margin expansion of 271bps YoY to 22.8%.

Adjusted PAT stood at Rs 8,317 million, rising 63.6% YoY.

R&D expenditure jumped 25.6% YoY to Rs 5,346 million, now 9.4% of sales, a clear investment into future pipelines.

U.S. Business: Tolvaptan Debut and Litigations Create Mixed Outlook

The U.S. market contributed USD 245 million, a 17.2% YoY increase, on the back of gPred Forte exclusivity and higher volumes of Mirabegron. Despite potential threats from ongoing litigation around Mirabegron, the launch of Tolvaptan (USD 1.5 billion market) is a notable win, securing six-month exclusivity.

Lupin is also preparing to introduce three complex injectables (Risperidone, Liraglutide, Glucagon) in H2FY26, signaling sustained momentum.

However, exclusivity loss in Tolvaptan and Spiriva could cap quarterly sales at USD 250 million post FY26,** tempering future earnings visibility.

India Business: Domestic Growth Slows, Recovery Expected in FY26

The India business recorded Rs 17,113 million in revenue, up 6.9% YoY but down 11.4% QoQ, impacted by loss of exclusivity in products like Empaglifozin. However, Lupin aims to regain market share by:

Adding 400–500 MRs annually, scaling to 2,000 by FY30.

Launching 80 new products over five years, targeting growth ahead of the Indian pharma market average.

Captive production of oral Semaglutide for GLP-1 class; injectables to be outsourced.

The chronic segment share is projected to increase from 64% to 70% by FY30, aided by growth in anti-diabetic, cardiac, and respiratory therapies.

European and Emerging Markets: Expansion Strategy in Motion

Lupin’s other developed markets posted 30% YoY growth to Rs 6,915 million, while emerging markets expanded 10.4% YoY to Rs 6,660 million. Key drivers included:

60% of Canadian revenues coming from specialty products.

Europe projected to derive 55% of sales from complex products by FY30.

Plans to launch 50 products in EMEA between FY26–30.

The company is conducting Phase 3 trials for NaMuscla for the U.S. and EU, which could bolster specialty revenue in FY27–30.

Biosimilars: Strategic Partnerships to Unlock Private Label Plays

In biosimilars, Lupin is shifting gears toward PBM (Pharmacy Benefit Manager) collaborations with companies like CVS Caremark and Express Scripts for manufacturing private-label biosimilars.

Launch roadmap:

Ranibizumab and Pegfilgrastim: FY27

Aflibercept and Etanercept: FY30

These launches will open up first-wave entry advantages with limited competition, a crucial element in sustaining U.S. growth after exclusivity lapses.

Financial Summary and Key Forecast Metrics

Balance Sheet Position and Capital Strategy

Lupin closed FY25 with a net cash position of Rs 31,423 million, and intends to raise up to Rs 100 billion in debt to fund strategic acquisitions in the U.S. and Europe. The company targets:

Acquisitions with 20% RoE and 4–5 year payback period.

Net Debt/EBITDA to stay below 2x, preserving leverage room.

This war chest offers flexibility to pursue inorganic growth, especially in the specialty and biosimilar spaces.

Valuation and Investment View: HOLD with Tactical Upside

ICICI Securities maintains a HOLD rating on Lupin with a target price of Rs 2,110, implying just a 2% upside from CMP of Rs 2,068. The valuation is anchored on 22x FY27E EPS.

Key Upside Triggers:

Higher-than-expected U.S. market share in key launches

Strategic M&A in India and the U.S.

Faster biosimilar approvals

Key Risks:

Patent litigation outcomes in Mirabegron

Regulatory delays in U.S. and EU filings

Price erosion in Albuterol and other legacy drugs

Final Take: Progress Amid Prudence

Lupin has executed a notable financial turnaround over FY23–25, fueled by select exclusivities and aggressive margin management. Yet, the forward narrative is one of tempered expectations. With exclusivity-driven growth peaking and pipeline opacity in H2FY26 onward, investors must rely on the firm’s biosimilar push, capital allocation agility, and therapeutic diversification to drive sustained value.

Target: Rs 2,110 | CMP: Rs 2,068 | Rating: HOLD