The other trigger would be growth in the domestic market, which accounts for about a third of sales. Analysts expect the company, which recorded growth of 13.4 per cent in domestic formulations for 9MFY20, to outperform the sector. With chronic medications expected to outperform the acute category for FY21, Lupin
should benefit as the chronic segment accounts for 61 per cent of its domestic sales — the highest across peers. About a fifth of sales is contributed by anti-diabetes (both own and licensed) medications, where visibility over the next couple of years appears robust.
Apart from regulatory issues, the near-term movement in the stock will depend on March quarter results. The company is expected to post strong margins, driven by robust sequential growth in the US market. This would be led by market share gains, new launches, and seasonal demand uptick.
Brokerages, such as Motilal Oswal Financial Services, are positive on the company because of limited price erosion in the base business, robust new-launch pipeline, and better-than-industry growth in branded domestic formulations.