Jul 6, 2001|
Lupin: Widening presence
Lupin Laboratories Ltd merged with Lupin chemicals Ltd last year to create a new entity "Lupin Ltd”. Lupin chemicals was in the business of bulk drugs. A merger of the two group companies made sense as it resulted in integration in the anti-TB market. The company has 40% market share in the anti-TB market.
The company manufactures and markets anti-TB formulation AKT–4 and also manufactures the bulk drug required for the formulation (rifampicin). The merged entity is now in a dominating position in anti-TB market and is globally competitive. On a merged basis, the sales for FY01, recorded a growth of 9.5% over FY00. The Anti TB segment of the company grew by 6.7 % in a degrowing market with products like AKT & Rcinex registering a 23 % & 10 % growth over the previous year period. Normally, it is the TB patients who are most vulnerable to AIDS. The company's drug is thus finding applications with AIDS patients.
Though a small base, other therapeutic segments like NSAID and cardiovascular recorded a healthy growth. This was on the back of new product introductions.
Lupin- Widening presence
||April 00- Mar 01
Lupin has a strong presence in the generics market and is one of the largest integrated generic cephalosporins (anti-infectives) manufactures in the world. It recently commissioned cephalosporins oral bulk active to cater to the generics market. The company has made entry into the European market with introduction of cefotaxime in UK and France. It is scouting for global marketing alliances.
At the current market price of Rs 76, the stock trades at a P/e of 5 times its FY01 earnings. Relatively low valuation is on account of high bulk drug exposure and major portion of company's formulation sales (52%) under DPCO coverage. The company will need to successful expand its presence in high growth therapeutic segment to ensure growth.
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