Lupin share falls 2%; Citi downgrades to Sell, cuts target price to Rs 2,050

Synopsis

Lupin shares fell after Citi downgraded the stock to ‘Sell’ and cut its target price to Rs 2,050. The brokerage expects weaker US base-business sales, margin pressure and limited benefits from new products. Citi also reduced FY27 EPS estimates by 14%. Lupin’s technical indicators remain bearish despite its oversold RSI reading.

Lupin shares came under pressure on Thursday after global brokerage Citi downgraded the stock to ‘Sell’ from ‘Buy’ and sharply cut its target price to Rs 2,050 from Rs 2,540. The stock fell as much as 1.84% to an intraday low of Rs 2,144.70 following the downgrade.

According to an ET Now report citing a Citi note, the downgrade reflects the brokerage’s concerns over Lupin’s US business, which has been a key driver of the company’s growth and profitability.

Citi expects Lupin’s US base business to lose momentum, with sales projected to decline to around $975 million by FY29. The brokerage also sees pressure on profitability, estimating that margins could fall to around 20% from the current level of nearly 30%. This would weigh on the company’s earnings growth if new high-margin products do not sufficiently offset the decline in existing products.

Citi expects Apixaban to provide some support to Lupin’s earnings in FY28, as the product could contribute meaningfully to the US business. However, the brokerage believes this benefit may be short-lived, limiting its ability to drive sustained earnings growth over the longer term.

Reflecting its more cautious outlook, Citi has also cut its FY27 earnings-per-share (EPS) estimate by 14%. Overall, the brokerage believes weakening momentum in the US base business, potential margin compression and limited sustainability of upcoming product benefits could pose challenges for Lupin’s earnings outlook.

Lupin Share Price and Technical Indicators

Lupin shares have come under pressure recently, with the stock declining around 10% over the past one month. The company currently has a market capitalisation of approximately Rs 98,497 crore, while its 52-week high stands at Rs 2,529.50.

On the technical front, Lupin’s 14-day Relative Strength Index (RSI) is at 29.3. An RSI reading below 30 generally indicates an oversold zone, suggesting the stock has witnessed significant selling pressure and could potentially see a short-term rebound if buying interest returns. However, an oversold reading by itself does not guarantee a reversal.

At the same time, the technical trend remains bearish, as Lupin is currently trading below all 8 key Simple Moving Averages (SMAs) being tracked. This indicates that the stock is facing broad-based downward momentum, and investors may look for signs of sustained buying before considering a meaningful trend reversal.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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