Lupin share price rises 5% after Kotak upgrades the stock and increases fair value; here’s what the brokerage says

Lupin share price: Shares of pharmaceutical major Lupin rose over 5 percent in morning trade on the BSE on Thursday, July 4, after brokerage house Kotak Securities upgraded the stock twice. Lupin’s share price opened at ₹1645 compared to the previous closing price of ₹1630.80 and rose by over 5 percent to the level of ₹1,714.10. However, the stock gave up some gains and traded 2.85 percent higher at ₹At around 10:05 a.m. it was 1,677.20 each.

Kotak upgrades Lupin shares

Brokerage house Kotak Institutional Equities (Kotak Securities) has upgraded Lupin shares from “Sell” to “Add”, which brings the fair value to ₹1,805 of ₹1,400 previously. This means an upside potential of almost 11 percent compared to the stock’s previous closing price.

“Our analysis of Lupin’s US portfolio leads us to believe that the company will positively beat Wall Street estimates in the US in FY 2025/2026. While we are aware that we do not attribute a high multiple to one-off gains, we stress that Lupin has a number of products in the pipeline that will ensure a limited earnings hit in FY 2027 after a strong FY 2026,” Kotak said.

“We are increasing earnings per share (EPS) for fiscal year 2025/2026 by 3-16 percent, with our EPS for fiscal year 2025/2026 now 6/13 percent higher than the Street. We are double upgrading Lupin from ‘sell’ to ‘add’ with a fair value of ₹1,805,” Kotak said.

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Kotak expects Lupin’s healthy U.S. sales performance to continue in fiscal 2025 despite a decline in albuterol and gSuprep.

It said that gSpiriva and albuterol will continue to be key with combined US sales contribution of $216 million and $188 million in FY25E and FY26E, respectively, but gMyrbetriq and tolvaptan will be key in driving US sales in FY25E and FY26E, respectively.

Kotak believes that fiscal 2026 will be a notable year for Lupin in the U.S., particularly due to the launch of tolvaptan in April 2025.

The brokerage expects Lupin to deliver healthy year-on-year U.S. revenue growth of 12 percent in FY25E ($914 million) and 11 percent in FY26E ($1,013 million).

Kotak believes that further positive surprises are possible if Lupin continues to increase its market share in gSpiriva and competition from albuterol turns out to be less than expected.

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On the stock valuation, Kotak said it expects a P/E (price-to-earnings) ratio of 25 instead of 22 in June 2026 due to better medium-term revenue and margin prospects.

Lupin’s share price has soared in the last year, rising nearly 83 percent on the BSE. The stock reached its 52-week high of ₹1,727.90 on May 22 this year, while its 52-week low ₹889.85, which it reached on July 7 last year.

Should you buy?

Even though the long-term prospects of Lupin shares appear attractive, some experts advise waiting a while before opening new long positions in the stock.

According to experts, the stock is struggling ₹Level 1,730.

Jigar S. Patel, Senior Manager, Equity Research, Anand Rathi Share and Stock Brokers, pointed out that Lupin’s stock has been trading in a price range of around Rs. ₹1,545 to ₹1,730.

In the last trading session, the stock faced significant selling pressure after hitting a high of ₹1,713, indicating that sellers are actively dumping their shares at the upper end of this range. Patel noted that this selling activity indicates resistance to higher price levels within the defined trading range.

“We recommend traders take advantage of this resistance by taking profits when the share price is between ₹1,700 and ₹1,710. For those who want to open new long positions, wait for a decisive daily closing price above ₹1,735 is a reasonable level that would signal a possible breakout from the current trading range and favorable conditions for further upside,” Patel said.

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Disclaimer: The views and recommendations above are those of individual analysts, experts and brokerage firms, not of Mint. We advise investors to consult certified experts before making any investment decisions.