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    Market Movers: Lupin shares in delicate condition on margin squeeze

    Synopsis

    Lupin's EBITDA margins contracted by 580 bps quarter-on-quarter (QoQ) and 1,050 bps YoY at 9.9 per cent even as profit rose 24 per cent YoY

    Market moversShutterstock.com
    All is not well for pharma major Lupin and that is visible in the company's share performance.

    The scrip has been falling for the past three sessions, with the fall getting exacerbated on Monday. The stock touched a new 52-week low in intra-day deals as Lupin's Q3 margin disappointed investors and analysts alike. The stock ended at Rs 804.45, down 7.66 per cent on BSE.

    "Lupin’s margins disappointed yet again in Q3FY22, with adjusted EBITDA falling 28% year-on-year (YoY), 12% lower than our estimate. Company guidance offers no reprieve, indicating that margins will stay subdued until US sales pick up," said Kotak Institutional Equities (KIE) while downgrading the stock to ‘Add’ from ‘Buy’.

    Lupin's EBITDA margins contracted by 580 bps quarter-on-quarter (QoQ) and 1,050 bps YoY at 9.9 per cent even as profit rose 24 per cent YoY.

    Managing Director Nilesh Gupta tried to assuage investor concerns saying the inflationary environment has impacted margins, but the company remains focussed on margin and EBITDA improvement as it delivers on key product launches, cost optimisation and improving efficiencies, especially by H2 FY23.

    Patch of Green

    On a day of market meltdown, the only sector that managed to hold its ground was the PSU Banking index, even as most of its constituents settled in the red. The index after touching a fresh 52-week high in trade ended with a gain of nearly 1 per cent on the back of rise in heavyweight State Bank of India (SBI) and Bank of Baroda following a strong Q3 show.

    SBI shares soared to a new high while BoB also touched a fresh 52-week high on market-beating performances in the December quarter.

    The sector has been buzzing off late with prominent investors like Rakesh Jhunjhunwala forecasting outperformance in the pack going ahead.

    Buyback Buzz


    Shares of midcap pharma company FDC Ltd surged as investors cheered the board's move on buyback proposal.

    The company on Friday, post market hours, informed exchanges that the board will meet on February 9 to consider the proposal for buyback of equity shares of the company through the tender offer route.

    In another update, the company informed that its oral solid dosage facility located in Goa has received a Good Manufacturing Practice (GMP) certificate.

    The stock settled at Rs 306, up 3.89 per cent. It rose as much as 8 per cent in trade today to an intra-day high of Rs 319 on BSE.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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