Lupin Falls 8% on Muted Growth Outlook

Shares of pharma company, Lupin fell over 8 per cent to hit intraday low of Rs 1,739.55 on Friday. The fall came on top of yesterday's 2.6 per cent decline. Morgan Stanley after a meet with Lupin's top management wrote in a report that it expects its organic revenue growth for FY2016 in the range of 10-15 per cent against their earlier estimate of 15-20 per cent. If the expectations of the brokerage come true then it will be for the time that Lupin will report sub-20 per cent revenue growth after many years. Lupin shares have been trading at rich valuations because of its strong revenue growth track record. However, after the recent earnings outlook its valuations look costly, which led to profit booking in the stock, say analysts. Meanwhile, CLSA has maintained its "buy" rating on Lupin with a price target of Rs 2,213. However, it says FY2016 is likely to be a slow year as near-term headwinds exists. US pipeline remains strong, the brokerage added. Lupin shares ended 6.55 per cent lower at Rs 1,776 apiece, underperforming the broader Nifty, which closed 1.16 per cent lower.