Equity Research Analysis on LUPIN Ltd.

Ritesh Jaiswal
PGDM No. 14120
Student PGDM 2014-16, SDMIMD, Mysuru
riteshjaiswal14120@sdmimd.ac.in

B. Venkatraja
Assistant Professor- Economics, SDMIMD, Mysuru
venkatraja@sdmimd.ac.in
95
 Comments by the Faculty
The present study has analyzed the fundamentals of Lupin Ltd for the period 2012-2015. The
author has taken efforts to study the performance of the Company by taking into account the
macroeconomic factors, industry factors and the Company’s financials. According to the findings
of the study conducted by the author, the impact of macroeconomic factors on the performance
of the Company was the minimum. The industry factor had an impact on the performance of the
Company.

From the organizational point of view, the study provides essential inputs to Hedge Equities Ltd
to take the position on the script of Lupin Ltd. It might also help the Organisation to decide
about the suitability of the stock in the portfolio created by Hedge Equities Ltd. The
macroeconomic findings are useful particularly for Hedge Equities Ltd in designing a general
approach towards the selection of stocks of other pharmaceutical companies.

The study has profound managerial and business implication. Such analysis supplies useful
and very essential information to the investing fraternity in taking a decision on investing in
the stock of Lupin Ltd, mainly to the new investors and helps existing holders to decide either to
‘hold’ or ‘sell’ the stock.

B.Venkatraja

96
 Equity Research on Lupin Ltd.
The summer internship project in Hedge Equities Ltd., Kochi (Cochin), involved doing an Equity
Research analysis on Lupin Ltd with main focus on finding out the real intrinsic worth of a
share. The project required to evaluate whether the share is undervalued or overvalued. And
then, give the recommendation of “BUY/SELL/HOLD”. Starting from top down approach of analysing
pharma industry the researcher could identify LUPIN Ltd. as the company to be researched
because of its market capitalization, strong financials, strong R&D performance, and efficient
management. It will be the best option to start with, for beginner and for easy understanding of
equity research analysis without complications.

Overview
Equity Research Analysis is a mathematical and fundamental way of looking at a company and
its future prospects. Analysis or valuation of any company can be done in two ways i.e.
Fundamental analysis and Technical analysis. Fundamental analysis is analysing the company
with the help of financial statements of the company which will be published annually and
quarterly. And technical analysis is analysing the movement of stock price in the stock markets.
Equity research is more of fundamental analysis whereby one tries to project the future earnings
of the company by analysing the past trends of growth of the company looking at the financial
statements of the same.

When companies are expanding if they want to raise capital from the market, they should
decide the price at which the shares should be offered to public which is determined with the
help of equity research. Private equity firms, venture capital firms also use these models in
their operations to determine fair value of the possible exit valuation.

Equity Research exercise starts with gathering together the historical financial data from the
annual and quarterly reports of the company. The researcher gathered the revenue drivers of
the company to check what drives the revenue and cost. After this some analysis as to how it is
changing year on year (YOY) and gather data about the industry to find which stage of industry
life cycle is it going through. We make some assumptions based on that to estimate a growth
rate for various items. Once all this is done, we try to project the future earnings of the company.
Then projections are made for the income statement, the balance sheet first and then the cash
flow statement.

Project Objectives
To perform stock valuation and find the intrinsic value of LUPIN Ltd. using fundamental analysis.

Ø Industry Analysis: To analyse the Pharmaceuticals industry ( focused markets in this research
are: India, US and Japan) and analyse the key revenue drivers, trends, growth potential,
opportunities and challenges, Government regulations and policies, economic scenario
and their impact.

Ø Company Analysis: To analyse the business of Lupin Ltd, its products offerings, business
divisions, subsidiaries, manufacturing plants, core competencies, strength and weaknesses.
97
Ø To perform the financial analysis of the company and create the financial model applying
the relevant valuation techniques to arrive at the firm’s fair value and target price.

Structure and Format of the Excel Sheet

Structuring and formatting of excel sheets is very vital for conducting an equity research analysis
in a proper way. One should have pre-determined styles, layout, and user interface to make the
model deliver proper results. Otherwise if one makes some correction in the model somewhere
it might affect various cells in the model. It can be very well said that building the model on a
new excel sheet is much easier than finding and correcting a mistake.

Few tips for proper and easier modelling with respect to design and formatting are as follows:

Ø Referencing is very important in making a proper model. Hence, all statements should be
entered in different Excel sheets so that referencing becomes easy.

Ø Other than the historical financial data and growth rates, it is suggested not to enter
anything manually. Referencing the cells should be done everywhere possible as it avoids
the task of tracking which cells are affected if one cell in the statement is changed.

Ø Calculations should be broken down into smaller work groups so that it becomes easy to
understand.

Ø We should take care of circular reference which might happen when same cell has been
referred in many places otherwise the output of modelling will not be reliable.

Ø It is important to use same number format in the entire spreadsheet be it in terms of units
(crores or millions) or decimals.

Collection of Data and Performance Analysis

Data for the financial modelling is basically derived from the three fundamental financial
statements of the company and the revenue drivers of the company. In addition to this, conference
call and earnings call transcripts are used for the purpose of our analysis. All the financial
data is fed into excel, with one statement in one sheet. The entire modelling revolves around
arriving at the revenue drivers and cost drivers. They are the major things that are required for
the projection. Revenue drivers are as name itself says they are the ones that drive that revenue
of the company. For example, number of models of cars of Toyota sold is the revenue driver of
Toyota, similarly number of units of Lupin pharmaceutical products sold is the revenue drivers
of Lupin Ltd. In my project on Lupin Ltd, collection of data on revenue drivers took a lot of time.
The researcher had to collect yearly sales data of formulations and Active Pharma Ingredients
(API). And under formulations, sales data was collected for different geographies like US, Europe,
Japan, India etc. because the researchers needed to project the sales for individual geographies
at individual levels based on the market scenario and the economy. One can see this in the table
from model given below.
98
 Table 1 - Raw Data Geography Wise
FY 2012 (A) 2013 (A) 2014 A) 2015 (A)
Formulations
US Sales 2530.00 3769.50 4875.10 5657.60
India Sales 1905.80 2364.40 2479.50 2967.90
Europe Sales 197.50 235.60 305.40 327.90
Japan Sales 860.70 1304.00 1295.50 1323.90
S.Africa Sales 255.40 321.00 380.00 421.80
ROW Sales 360.90 517.30 637.10 706.50
6110.30 8511.80 9972.60 11405.60
API 849.10 949.80 1114.00 1194.10
Net Sales 6959.40 9461.60 11086.60 12599.70

Source: Lupin Ltd. Annual reports.

Table 2 - Projections – Geography Wise

FY 2016 [E] 2017 [E] 2018 [E] 2019 [E] 2020 [E] 2021 [E]
Formulations
US Sales 7641.176 9593.928 12045.72 15124.08 18989.14 23841.94
India Sales 3254.75 3569.324 3914.302 4292.623 4707.509 5162.493
Europe Sales 381.85 444.6765 517.8399 603.0411 702.2606 817.8049
Japan Sales 1541.3 1794.4 2089.061 2432.11 2831.491 3296.455
S.Africa Sales 484.1 555.6017 637.6643 731.8475 839.9416 964.0013
ROW Sales 844.6 1009.694 1207.06 1443.005 1725.07 2062.271
14147.78 16967.63 20411.65 24626.71 29795.42 36144.97
API 1326.55 1473.691 1637.154 1818.747 2020.484 2244.596
Net Sales 15474.33 18441.32 22048.8 26445.46 31815.9 38389.57
Revenue drivers can be collected from many authentic sources available on the internet. This
data of sales segment wise is available in the company website as well. By summing up the
sales of from all the geographies and segments one gets the annual sales of Lupin Ltd. The entire
process of modelling starts by projecting the revenue drivers for future years. Industry analysis
and some more research is done to arrive at a growth rate for the sales of the company. Once
this is done revenue per unit is calculated by dividing the sales of the company by number of
99
units sold. And based on some analysis taking into account-inflation, income levels, level of
economy etc. growth rate for increase in geographic wise sales price per unit is ascertained
and it is multiplied with revenue drivers for the purpose of arriving at the figure of sales.

Performance Analysis of the company will start from the analysis of the annual reports of the
company for past few years which will contain director’s report, auditor’s report, management
discussion and analysis and the basic financial statements of the company etc. These are all
great sources of information about the company. Another kind of analysis could be analyzing
risks for the company, which may be:

Ø Currency Risks
Ø Regulatory and Legal Risks
Ø Research Risks
Ø Capacity Utilization Risks
Ø Geographical Risks
Ø Environment Risks
But, my analysis was primarily focused on data points available from the company’s annual
reports.

Ratio Analysis to Determine the Financial Health

Ø Liquidity Measurement Ratios

• Current Ratio
• Quick Ratio
• Cash Conversion Cycle (CCC)
Ø Profitability Indicator Ratios
• Gross Profit Margin
• Net Profit Margin
• Return on Assets
• Return on Equity
• Return on Capital Employed
Ø Investment Valuation Ratios
• Dividend Payout Ratio
• Price to Book Value Ratio
• Price to Earnings Ratio
• Dividend Yield Ratio
• Market Capitalization to Sales Ratio
Ø Operating Performance Ratios
• Fixed Assets Turnover Ratio
100
Ø Debt Ratio
• Debt Ratio
• Debt Equity Ratio
• Interest Coverage Ratio
A quick analysis has shown that Lupin’s ROCE value has increased from 27.74% to 39.83%, net
increment of 43.58%, this implies that the company is making judicious use of the capital
employed. ROE has increased from 22.12% to 26.97% for 2014-15. Gross Profit ratio has
increased from 32.97% to 40.49%. Net profit ratio has also increased from 12.75% to 16.86%.
One thing very peculiar for Lupin is that it is a no-debt company. And this can be very clearly
seen from the debt equity ratio of recent year which has declined from 40.85% to 9.43%. All the
major profitability ratios has increased Y-O-Y basis. This implies that the company is working
efficiently to convert every rupee earned in revenue to profit.

Table 3 - Key Ratios Indicating the Financial Health of Lupin Ltd.

Key Ratios M ar-12 M ar-13 Mar-14
Current Ratio 1.392 1.710 2.253
Cash Conversion Cycle 94.274 91.166 92.059
Gross Profit Margin 32.97% 36.95% 40.49%
Net Profit Margin 12.75% 14.17% 16.86%
Return on Assets (ROA) 11.18% 15.16% 18.77%
Return on Equity (ROE) 22.12% 25.76% 26.97%
Return on Capital Employed 27.74% 39.37% 39.83%
Debt Equity Ratio 40.85% 22.38% 9.43%
Dividend Payout Ratio 16.24% 10.88% 17.49%
Price/Book Value Ratio 5.761 6.401 11.455
Price/Earnings Ratio 26.511 25.270 43.186
Dividend Yield Ratio 0.62% 0.54% 0.17%
Price to Sales Ratio 3.264 3.455 7.035
Forecasting Models
The type of forecasting method you select depends on the nature of your item. Are there seasonal
trends? Is demand steady, cyclical or sporadic? Are trends strong or limited? Is the item new?
Because each item you forecast has a different history (and future), you should select a method
most appropriate to each item. A forecasting method that fits well for one data set might be
inaccurate for another item. Deciding which forecasting method to select can be challenging,
especially across a large product line and using only spreadsheets. Sophisticated forecasting
software can test multiple methods for each item and determine which method will give you the
most accurate results.
101
Few methods that could be used in different situations include moving averages
(when no particular trend or pattern is observed in sales), weighted moving average (when
we need to lay some emphasis on some data points than on others), exponential smoothing
(when more stress is to laid on recent data and you want to capture some trend or pattern),
adaptive filtering (when we want to rearrange the weights and make the data get closer
to reality). These are few of the different methods that could be used for the purpose of
forecasting. All these methods unless backed up by proper research and analysis cannot give
reliable answers.
Forecasting Financials
Forecasting of financials starts from forecasting of revenue drivers in the models. Forecast
of revenue drivers is done based on the industry analysis, research as to what drives the
growth of revenue drivers etc. For example, if we are forecasting revenue drivers of Lupin
i.e. number of units of pharmaceutical products that will be sold, we have to do research
on what drives increase in pharmaceutical products sale i.e. it can be increase in per
capita income of people, increase of lifestyle diseases, better medical insurance coverage
etc. we also look at the conference call transcripts of the company which gives some indications
as to what could be the growth rate of pharmaceutical products in the country and
around. Based on all this one sets a percentage growth rate for specific geographies in which
the company is operating. Based on this, revenue drivers are forecasted for future. Once
the revenue drivers are forecasted, one calculates the sales price per unit of pharmaceutical
product sold and cost per unit of pharmaceutical product sold. With the help of this one
can arrive at the gross profit. Next the researcher tried to forecast the other operating expenses
like staff costs, selling and administrative expenses etc. which helps in arriving at the
net profit.
The method used in modelling of Lupin was “Percentage of sales method.” This method takes all
costs and line items as a percentage of sales, so that it becomes easy to track and project as
well. In the modelling exercise all the costs were taken as percentage of sales which can be seen
from the Table 4.
Table 4 - Percentage of Sales Method in Modelling
Mar 12 Mar 13 Mar 14 Mar 15 Mar 16
As a Percentage of Net Sales
[A] [A] [A] [A] [E]
Raw Material Consumed 38.41% 35.96% 33.10% 33.10% 33.10%
Power & Fuel Cost 3.86% 3.38% 3.02% 3.02% 3.02%
Employee Cost 13.93% 13.39% 13.21% 13.51% 13.51%
Other Manufacturing
Expenses 10.82% 10.32% 10.19% 10.19% 10.19%
General and Administration
Expenses 6.77% 7.31% 7.31% 7.31% 7.31%
Selling and Distribution
Expenses 9.31% 7.50% 6.99% 7.93% 7.93%
Miscellaneous Expenses 2.34% 1.95% 2.56% 2.28% 2.28%
Other Income 0.20% 0.29% 1.03% 2.00% 1.52%
Depreciation 3.21% 3.45% 2.31% 3.00% 2.92%
102
For further years, based on the historical average, inflation, GDP growth rate and various
other parameters a growth rate will be fixed and cost items will be forecasted. For projecting
accounts receivables and payables, we look at the historical trend and if we observe there
is no much volatility we use the average of last 3 year’s day’s payables and receivables for
forecasting into future. If we observe too much volatility and then we have to dig down and find
out the reason why it is so and then fix a growth rate based on the observation. Capital
expenditure has to be done by companies to grow their businesses. This could be in the form
of new plant or new building. Capital expenditure projections for the 1st two three years can
be done with the guidance of the management or we can even get planned capital expenditure
from the conference call transcript of the company and such announcements made by
the company. Over the long term capital expenditure has to be in-line to maintain the revenue
to gross assets ratio.

Cash Flow
Forecasting the free cash flow for future years is very important output of modelling as it is the
one which shows the future profitability of the company. Business have to generate free cash
flow over long run in order to meet the financial needs of the organization. It can be paying of
dividends to owners of the company (equity shareholders), interest, meeting capital expenditure,
paying dividend to preference shareholders. In essence of analysis and valuation, free cash
flow is expressed as operating cash flow less, any capital expenditure essential to maintain the
current growth rate.

Investors prefer using free cash flow instead of net income to measure a company’s
financial performance, because free cash flow is more difficult to manipulate than net
income. Negative free cash flow is not always a bad thing, if there are huge investments in
new capacities, which would enhance growth over the years it is good and creates value
for shareholders.

Free cash flow is determined for the projected years, which could be five years or ten years.
Companies continue to operate and generate cash flow after the projected period. This means
companies live into perpetuity. To project cash flows after a few years is extremely difficult task
and the present value of cash flows far into future will have little impact, to solve the problem
we use terminal value.

Terminal value is the value of all the future cash flows of the company from the end of the
projected period to perpetuity. Terminal value is a factor of free cash flow of the last year of the
projected period, long term growth rate and weighted average cost of capital of the company.
Terminal value is the product of free cash flow of one year forward at the end of the projected
(FCFn+1 = FCFn x (1+long term growth rate) period and terminal multiple ( 1/(Weighted Average
Cost of Capital - Long term growth rate))

We can see the cash flows projected in Lupin financial model from the Table 5.
103
 Table 5 – Part A: Calculation of Free Cash to the Firm (FCFF)

PART A Actual Forecast

FY2012 FY2013 FY2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY2021
[A] [A] [A] [A] [E] [E] [E] [E] [E] [E]
Full year Sales 6959.40 9461.60 11086.60 12599.70 15474.33 18441.32 22048.80 26445.46 31815.90 38389.57
Sales Reduction 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Full Year Net Sales 6959.40 9461.60 11086.60 12599.70 15474.33 18441.32 22048.80 26445.46 31815.90 38389.57
Other Operating Income 0 0 0 0 0 0 0 0 0 0
Net Sales & Other
Operating Income 6959.40 9461.60 11086.60 12599.70 15474.33 18441.32 22048.80 26445.46 31815.90 38389.57
Total Expenditure 5638.20 7371.41 8283.78 9440.64 11646.59 13869.20 16528.83 19857.70 23880.72 28806.65
PBIDT (Excluding Other
Income) 1321.20 2090.19 2802.82 3159.06 3827.73 4572.11 5519.97 6587.75 7935.18 9582.91
Other Income 14.35 27.85 116.48 239.70 234.44 279.39 369.68 414.90 504.87 618.38
Operating Profit 1335.55 2118.04 2919.30 3398.76 4062.17 4851.50 5889.65 7002.65 8440.05 10201.29
Interest 35.47 40.95 26.65 13.77 10.66 9.13 7.30 6.22 5.31 4.55
Exceptional Items 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PBDT 1300.08 2077.09 2892.65 3384.99 4051.51 4842.37 5882.36 6996.44 8434.74 10196.75
Depreciation 227.52 332.19 260.97 434.70 451.85 538.49 643.83 772.21 929.02 1120.98
PBT 1072.56 1744.90 2631.68 2950.29 3599.66 4303.88 5238.53 6224.23 7505.72 9075.77
Tax 308.56 584.16 962.15 970.40 899.91 1075.97 1309.63 1556.06 1876.43 2268.94
Profit After Tax 764.00 1160.74 1669.53 1979.89 2699.74 3227.91 3928.90 4668.17 5629.29 6806.83
Minority Interest 19.86 26.28 33.13 33.79 34.46 35.15 35.85 36.56 37.29 38.03
104

Consolidated Net Profit 783.86 1187.02 1702.66 2013.68 2734.21 3263.06 3964.74 4704.73 5666.57 6844.86
PAT Margin 0.11 0.12 0.15 0.16 0.17 0.18 0.18 0.18 0.18 0.18
EPS 17.48 26.47 37.97 44.91 60.98 72.78 88.42 104.93 126.38 152.66
 Table 5 – Part B: Calculation of Free Cash to the Firm (FCFF)

PART B Actual Forecast

FY2012 FY2013 FY2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY2021
[A] [A] [A] [A] [E] [E] [E] [E] [E] [E]
PAT 783.86 1187.02 1702.66 2013.68 2734.21 3263.06 3964.74 4704.73 5666.57 6844.86

Net 784 1,187 1,703 2,014 2,734 3,263 3,965 4,705 5,667 6,845
Add back
Depreciation 227.52 332.19 260.97 434.70 451.85 538.49 643.83 772.21 929.02 1120.98
Less Capex 551.40 487.10 437.60 790.20 850.00 400.00 400.00 400.00 400.00 400.00

Inventories 1732.67 1,949 2,129 2,589 3,147 3,826 4,651 5,654 6,873 8,356
Debtors 1780.01 2186.99 2464.10 3046.59 3766.78 4657.21 5758.14 7119.31 8,655 10,521
Loans and advances 306.12 339.67 301.69 312.46 323.61 335.17 347.13 359.53 437 531
Other current
assets 121.05 232.66 231.30 236.15 241.09 246.14 251.30 256.56 312 379
Liabilities &
provisions 3120.30 3006.92 2629.55 3509.00 4682.57 6248.65 8338.49 11127.28 13,527 16,445
Net Working Capital 820 1,701 2,497 2,675 2,796 2,816 2,669 2,262 2,750 3,343
Change in Net
Working Capital 882 796 178 121 20 -147 -407 488 593
FCFF 460 150 730 1,480 2,215 3,382 4,355 5,484 5,708 6,973
Terminal Value 94976.474
105

FCFF for NPV

Calculation 460 150 730 1,480 2,215 3,382 4,355 5,484 5,708 1,01,949
Valuation
Valuation is the process of determining the current worth of an asset or company. There are
many techniques that can be used to determine value, some are subjective and others are
objective. The whole objective of financial modelling exercise is to find the value of the stock of
the company. By finding this out we will be able to say whether the company is over-valued or
under-valued. Valuation can be classified into absolute valuation and relative valuation.
Absolute valuation is finding the present value of future cash flows of the company. The second
method is relative valuation, where the stocks are priced in relation to their peers by various
methods based on earnings, book value, enterprise value to sales etc. Absolute valuation is the
present value of the cash flows that we calculate in the financial modelling exercise. Discount
rate will be the cost of capital which can be found out using capital asset pricing model and we
find out the present value, then we divide it by number of shares outstanding to find out the
value of the share.

Free cash flow can be calculated in various ways. One way is to take profit after tax and as a
first step add back depreciation and amortization expenses because they are non-cash
expenditure and a positive cash flow for the company. Then second step is adjusting working
capital changes. It includes all the items components that form part of the operating activities.
The key is to follow a consistent approach on how the calculations is done, as long as the
direction of cash flow is clear and applied it should not change the ultimate result. For the
purpose of valuation we deduct interest income and income generated from investments adjusted
for taxes (interest income x (1-tax rate)) from cash flow calculations.

Formula to calculate FCFF:

FCFF = NI + NCC + [Int * (1 – tax rate)] – FCInv – WCInv
Wherein,
NI = Net income,
NCC = Noncash expenses,
FCInv = capital expenditure
WCInv = changes in working capital

In the valuation process calculation of cost of capital & growth rate becomes important. Cost
of capital can be calculated with the help of weighted average cost of capital. Companies raise
capital from different sources like equity, debt, preference shares and retained earnings. The
cost of capital is the minimum return that should be earned by the company to satisfy all the
suppliers of capital. Dividend should be paid to shareholders and interest should be paid to
debt holders. So that minimum amount of profits that the company should earn is the cost of
capital. Weighted average cost of capital is broadly a factor a cost of debt and cost of equity
where as other forms of financing will cost fall in between the two poles. To determine the cost
of debt, the easiest is to see the cost of debt on the company balance sheet. Cost of equity is
106
calculated using typical capital asset pricing model (CAPM) method. Cost of equity is a factor
of risk free rate, market premium and beta. Beta is the measure of volatility of the stock in
relation to the market. It can be calculated manually using regression analysis or another
formula (covariance of asset/ variance of market). The third component of cost of equity
is to determine the market premium which is the difference between expected market return
and risk free rate.

Enterprize value is calculated as market capitalization plus debt, minority interest and preferred
shares, minus total cash and cash equivalents. The reason for using enterprise value is in the
event of a buyout; an acquirer would have to take on the company’s debt, but will also get the
cash. Enterprise value differs significantly from simple market capitalization in several ways,
and many consider it to be a more accurate representation of a firm’s value. The value of a
firm’s debt, for example, would need to be paid by the buyer when taking over a company, thus
EV provides a much more accurate takeover valuation because it includes debt in its value
calculation.

In this study, in financial modelling exercise all the cash flows projected are at the company
level and this is used to calculate the enterprise value to arrive at a fair market price for the
stock. Enterprise value for the financial modelling exercise is the net present value (NPV) of the
projected cash flows and terminal value for the company. Enterprise value includes all forms of
shareholders like debt, minority interest, preferred equity and equity holders.

The objective of modelling exercise is to identify the fair value for the stock, so from the
enterprise value we deduct debt, minority interest, and add cash and investments to arrive at
the fair market value of the company. Fair market value divided by the number of shares
outstanding would give us the fair market value per share. This is how we calculate the intrinsic
value of share using discounted cash flow. We perform relative valuation as well to compare
the intrinsic value with peers on various metrics like price to book value, earnings per share,
enterprise value to sales etc. in order to arrive at a fair band within which the share’s intrinsic
value lies. Based on this value we take a position in the stock.

Final Results
DCF Price 1,641

PE Price 1,829

Target Weighted Price 1,735

MOS 10%

Price after MOS 1,438

Closing Price as on 26-05-2015 1,752

107
Summary
• After the thorough analysis of the company’s fundamentals, the industry perspectives and
the geographic based opportunities and challenges, the fundamental analysis for the LUPIN
Ltd. was done.

• Not many macroeconomic parameters like GDP growth, consumer spending and changing
interest rates affects the industry as key drugs form the necessity rather than the luxury.

• The company has an experienced management team and strong business fundamentals,
and it has shown continuous above average growth in last 3 years.

• The company is now much aggressive on the acquisition front with a calibre to spend USD
$ 1 to 1.2 Billion.

Bibliography
Educating the world about finance. (2015). Retrieved September 30, 2015, from http://
www.investopedia.com/

Lupin. (2015). Retrieved September 30, 2015, from http://lupinworld.com/press-release.php

Research, C. for D. E. and. (2015). Understanding Generic Drugs - Facts about Generic Drugs
[WebContent]. Retrieved September 30, 2015, from http://www.fda.gov/drugs/
resourcesforyou/consumers/buyingusingmedicinesafely/understandinggenericdrugs/
ucm167991.htm

108