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ICICI Securities: Maintain ‘hold’ on Lupin, revised target price Rs 732

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ICICI, Lupin, market, market news, USFDA, ProAir, EBITDA, Lupin share, Lupin ltdMandideep was inspected in Dec’18 and a total of 22 observations were issued across three units

Lupin has announced that the USFDA has issued a warning letter for its Mandideep (unit-I) facility in Madhya Pradesh. This plant manufactures cephalosporin API and formulations. The warning letter follows an inspection of the plant in Dec’18 and its classification as OAI (official action indicated) in Mar’19. Further, Lupin has recently received CRL (complete response letter) for ProAir, which could delay the launch further to Q2FY21.

Mandideep was inspected in Dec’18 and a total of 22 observations were issued across three units. Later, Unit-I was classified as OAI and has now received the warning letter. We expect it to take more than a year for the issue to get resolved considering the history of warning letter resolutions.

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ProAir approval likely to be further delayed: Lupin has received CRL for ProAir, which may delay the approval further to Q2FY21 vs earlier expectation of Q4FY20. The USFDA has not approved any generic of this inhalation product and there are two more companies working on it. Lupin is likely to be the first generic company to get approval; however, continual delay would impact the opportunity value. We reduce our revenue estimate for this product to US$36mn in FY22E vs our earlier expectation of the same happening in FY21.

Outlook: We expect revenue/ EBITDA/ PAT CAGRs of 8.9/12.9/32.8% respectively over FY19-FY22E. Strong earnings growth is expected to be driven by 200bps EBITDA margin expansion with improving revenue mix (higher US sales from limited-competition products) and cost reduction measures via R&D rationalisation.

Valuations and risks: We cut our EPS estimates by 3-4% and maintain our ‘hold’ rating on the stock with a revised target price of Rs 732/share based on 20x FY21E EPS (earlier: Rs 758).

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Orient Paper Reports A Weak Quarter

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Orient Paper expects realisation to improve. In conversation with its Managing Director Manohar Lal Pachisia.
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Lakers Legend Kobe Bryant Dead in Helicopter Crash | KTLA 5 News

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Update: Legendary Laker Kobe Bryant died after the helicopter he was in crashed on a hillside in the Calabasas area on Jan. 26, 2020.

KTLA 5 News in Los Angeles had live coverage of the breaking story as the news unfolded. More details: #Lakers #KobeBryant #Kobe

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SC expunges SAT’s adverse comments against Sebi in investor complaint case

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The Supreme Court has expunged adverse comments made by the Securities Appellate Tribunal (SAT) against market regulator Securities and Exchange Board of India (Sebi) in a recent order pertaining to handling of an investors complaint.


“We have no hesitation in stating that the Sebi as a regulator in the instant case has not performed its duties and has kept the complaint pending for more than six years which speaks volumes by itself. The tribunal fails to fathom as to why the complaint could not have been decided unless Sebi officials had a vested interest in not deciding the matter,” SAT had observed in an order dated November 14, 2019.



The market regulator had challenged the order before the SC on the ground that a computer-generated response by Sebi cannot be regarded as an order. Further, it argued that SAT had exceeded its jurisdiction in making the adverse remarks against Sebi.


After hearing the matter, the apex court agreed to expunge the adverse remarks made by SAT. The court also allowed a period of four months for disposal of the case.


“We are of the opinion that certain observations made in the impugned order were not called for, such as “the computer-generated disposal of a serious complaint speaks volume on the conduct of the respondents” as well as the part of the order relating to “vested interest in not deciding the matter” were not at all called for,” SC said.


“May be there was some remiss on the part of Sebi to act as a regulator, but casting aspersion was not warranted in the facts and circumstances of the case. As such, the adverse observations made in Paragraph No. 20 are hereby diluted,” it further said.





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