Lupin (LUPIN)
Fast GrowerFairStock Score: 74/100 — STEADY
Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹2,235 |
| Market Cap | ₹1,02,192 Cr |
| P/E Ratio | 18.52 |
| ROCE | 21.3% |
| ROE | 27% |
| Dividend Yield | 0.81% |
| Profit Growth | 27.56% |
| Debt/Equity | 0.29 |
| Sales Growth | 24.45% |
| Free Cash Flow | ₹-1,172 Cr |
| Promoter Holding | 46.89% |
| 52-Week Range | ₹1,900 — ₹2,529.5 |
| Sector | Pharmaceuticals & Biotechnology |
| Book Value | ₹491.02 |
Strengths
- ROE of 27% and ROCE of 21.3% show strong capital efficiency and a competitive position.
- Debt/equity of 0.32 and Altman Z-Score of 4.53 indicate a healthy balance sheet.
- Piotroski F-Score of 8/9 reflects solid fundamental health across profitability, leverage and efficiency.
- Sales growth of 18.86% and profit growth of 61.93% show strong business momentum, with PEG of 0.71.
Concerns
- Free cash flow is negative at ₹-1,172 Cr, so reported profits are not translating into cash.
- Valuation is rich: P/E 21.15, P/B 6.22, EV/EBITDA 37.42, and price far above the Graham Number of ₹929 leaves no margin of safety.
- Long-term growth is more moderate: 5-year revenue CAGR of only 8.41% versus the recent surge, making sustainability uncertain.
- Dividend yield is just 0.52%, so investor returns depend almost entirely on price appreciation.
AI Analysis
The first thing I see is a high-quality franchise. Lupin earns 27% on equity and 21.3% on capital, with debt only a third of equity. In the latest quarter, it earned ₹1,181 Cr on ₹7,168 Cr sales—a margin near 16.5%. The Piotroski score of 8 and Altman Z of 4.53 confirm a solid financial foundation. But I must value it, not just admire it. At ₹2,341, the stock trades at 21.15 times earnings and 6.22 times book value. Graham would want a margin of safety; here the Graham number is only ₹929, meaning the market is paying a huge premium above what conservative metrics suggest. The negative free cash flow of ₹1,172 Cr bothers me deeply. A business can report accounting profits while cash flows the other way; for a shareholder, cash is the ultimate reality. The 18.86% sales growth and 61.93% profit growth are impressive, and the PEG of 0.71 suggests growth is not fully priced if these rates continue. Yet the 5-year revenue CAGR of 8.41% reminds me that pharmaceutical growth can be lumpy, and EV/EBITDA of 37.42 prices in a lot of good news. Even a wonderful business at too high a price can deliver poor returns for years. I would keep it on my watchlist, not buy at this price. Quality matters, but price is what I have to pay.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer