Lupin faces slew of "downgrades"

The woes of Lupin just got  a bit worse. After the US FDA, it is the brokerage houses. Lupin went down intra day to Rs.1597.60, very close to its 52-week low of Rs.1589.40. Though recovered to Rs.1600 levels, the stock remains firmly in the red, down over 4%.

CLSA put out a report, downgrading the stock from buy to underperform and cut its target price from Rs.2162 to Rs.1800. It stated that it does not see any positive triggers on the counter in medium term and it expects price to remain rangebound until its Goa plant does not get a clearance from the US FDA.

Kotak has also downgraded the stock to “reduce”. It stated in its report, “Lupin Pharmaceuticals had a double whammy as news of a form 483 at its key Goa facility led to fears about negative FDA action, though we are yet to see the 483. At the same time, Valeant reported $86 million revenues for Glumetza in 4QCY16, far lower than consensus estimates of $100-150 million market size, and reflecting our views of 70% rebating. We now see a possibility of 10% downgrade to FY17 consensus EPS on back of lower Glumetza sales.”

More downgrades are expected to follow.