Morgan Stanley Research is Overweight on Lupin Laboratories Ltd with the following note,
Lupin stock is down 12% on the back of FDA inspection at one of its manufacturing site located at Mandideep. FDA inspected this site in February and issued two observations each (on form 483) at its cephalosporin API and formulation units. Lupin generates roughly $200 mln cephalosporin sales from this site (lisinopril not included). According to management, FDA has classified all four observations as Voluntary Action Initiated (VAI), which is generally benign and does not escalate into Warning Letter.
They have a Price Target of Rs 2,133 on Lupin by applying a target P/E of 25x (in line with the industry average) to our EPS
estimate of Rs85.3 for the 12 months ending Sep-2017
