`
`Company report
`
`
`Healthcare
`
`Pharmaceuticals
`Equity – India
`
`abc
`Global Research
`
`Lupin (LPC IN)
`
`OW: US fires in 3Q; expect a booster in 4Q
` Strong US sales led to strong net profit beat of 11%; EBITDA
`margins broadly in-line with lower expenses, offsetting lower
`gross margins
`
` US outlook robust with launches of gNiaspan, gRenagel, and
`gRenvela in 4Q, supported by recent key launches
`
` Remain OW on robust outlook with a revised TP of INR1,081
`(from INR1,055)
`
`
`Strong beat in 3QFY14 profit: Lupin reported net profit of INR4.8bn (+42% yoy), c11%
`higher than HSBCe and the consensus estimate of cINR4.3bn. This strong beat is driven by
`robust US sales of USD215m, which came c12% higher than HSBCe. Gross margins were
`below our estimates on product mix change and forex translation impact from Japan. However,
`lower other expense compensated for higher raw material costs, which resulted in broadly in-
`line EBITDA margins of 25.6% (+140bp yoy). The tax rate remains higher at 34.4% versus
`HSBCe of 33% in 3Q.
`
`US led 3Q sales growth; India, Japan slightly below expectation: Total 3Q sales at
`INR29.8bn (21% yoy) were primarily driven by strong US and bulk sales. US sales at
`USD215m (12% yoy) were driven by new launches (gCymbalta, gTrizivir, and gZymaxid).
`Suprax prescriptions have picked up but the larger effect will be visible in 4Q. India was
`marginally low at 14% yoy. Japan sales were flat yoy due to continued weakness in I’rom sales
`on the back of continued declines in the contract manufacturing business and JPY movement
`against the INR. Bulk sales were strong, driven by good volumes in cefadroxil API in India.
`
`Robust US outlook as launches bunch up: The near-term pipeline of gNiaspan (semi-
`exclusive), gRenagel (FTF), and gRenvela (FTF on suspension), supported by traction in new
`launches like gCymbalta, gTrizivir, gZymaxid, gTriLipix, and gYasmin, will bolster the US.
`We expect a strong Q4FY14 and 1QFY15 on the back of these products. Lupin has acquired
`Nanomi in the Netherlands to focus on complex injectable filings for US market apart from the
`existing platforms for derma, respiratory, controlled substances, and biosimilars.
`
`Remain OW with a revised TP: We are revising our US sales forecast higher on the back of
`better performance in recent launches, new approvals, and higher realizations. We roll forward
`our TP to Dec-14 from Sep-14 and value Lupin at 21x (unchanged, 5% premium to sector
`average) Dec-15 EPS of INR51.5 to arrive at new TP of INR1,081 (from INR1,055). Key risks
`are slow approvals in US and a delay in recovery in I’rom in Japan.
`
`Index^
`Index level
`RIC
`Bloomberg
`Source: HSBC
`
`BOMBAY SE IDX
`20,209
`LUPN.BO
`LPC IN
`
`Enterprise value (INRm)
`Free float (%)
`Market cap (USDm)
`Market cap (INRm)
`Source: HSBC
`
`413,527
`53
`6,599
`413,305
`
`1,081.00
`921.90
`0.7
`18
`
`Overweight
`Target price
`(INR)
`Share price
`(INR)
`Forecast dividend yield (%)
`Potential return (%)
`Note: Potential return equals the percentage
`difference between the current share price and the
`target price, plus the forecast dividend yield
`Mar
`2013 a 2014 e
`HSBC EPS
`28.46
`37.21
`HSBC PE
`32.4
`24.8
`Performance
`1M
`3M
`Absolute (%)
`-1.2
`4.5
`Relative^ (%)
`2.0
`9.6
`
`
`2015 e
`44.41
`20.8
`12M
`51.2
`48.0
`
`3 February 2014
`
`
`
`Girish Bakhru*, CFA
`Analyst
`HSBC Securities and Capital Markets
`(India) Private Limited
`+91 22 22681638
`girishbakhru@hsbc.co.in
`
`
`
`Damayanti Kerai*
`Associate
`Bangalore
`
`View HSBC Global Research at:
`http://www.research.hsbc.com
`*Employed by a non-US affiliate of HSBC
`Securities (USA) Inc, and is not
`registered/qualified pursuant to FINRA
`regulations
`Issuer of report: HSBC Securities and
`Capital Markets (India)
`Private Limited
`Disclaimer &
`Disclosures
`This report must be
`read with the
`disclosures and the
`analyst certifications in
`the Disclosure
`appendix, and with the
`Disclaimer, which
`forms part of it
`
`
`SENJU EXHIBIT 2022
`INNOPHARMA v. SENJU
`IPR2015-00903
`
`Page 1 of 11
`
`

`

`Valuation data
`03/2013a
`Year to
`4.4
`EV/sales
`18.8
`EV/EBITDA
`7.0
`EV/IC
`32.4
`PE*
`7.9
`P/Book value
`1.6
`FCF yield (%)
`0.4
`Dividend yield (%)
`Note: * = Based on HSBC EPS (fully diluted)
`
`
`Price relative
`1026
`926
`826
`726
`626
`526
`426
`326
`2012
`
`1026
`926
`826
`726
`626
`526
`426
`326
`2015
`
`2013
`
`2014
`Rel to BOMBAY SE SENSITIVE INDEX
`
`Lupin
`
`Source: HSBC
`
`
`
`Note: price at close of 03 Feb 2014
`
`abc
`
`03/2014e
`3.6
`14.4
`6.0
`24.8
`6.2
`1.8
`0.7
`
`03/2015e
`3.2
`12.5
`5.3
`20.8
`5.0
`2.7
`0.9
`
`03/2016e
`2.8
`10.8
`4.5
`17.1
`4.1
`2.5
`1.1
`
`
`Lupin (LPC IN)
`Pharmaceuticals
`3 February 2014
`
`
`
`
` Financials & valuation
`
`
`
`95,985
`22,272
`-2,586
`19,686
`-269
`19,246
`19,246
`-5,842
`13,142
`12,707
`
`10,354
`-3,761
`-3,731
`-2,796
`-5,387
`6,764
`
`Financial statements
`03/2013a
`Year to
`Profit & loss summary (INRm)
`Revenue
`EBITDA
`Depreciation & amortisation
`Operating profit/EBIT
`Net interest
`PBT
`HSBC PBT
`Taxation
`Net profit
`HSBC net profit
`Cash flow summary (INRm)
`Cash flow from operations
`Capex
`Cash flow from investment
`Dividends
`Change in net debt
`FCF equity
`Balance sheet summary (INRm)
`Intangible fixed assets
`Tangible fixed assets
`Current assets
`Cash & others
`Total assets
`Operating liabilities
`Gross debt
`Net debt
`Shareholders funds
`Invested capital
`
`9,927
`23,182
`55,326
`4,369
`88,434
`24,427
`9,739
`5,369
`52,042
`59,638
`
`
`Ratio, growth and per share analysis
`Year to
`03/2013a
`Y-o-y % change
`
`Revenue
`36.1
`EBITDA
`57.3
`Operating profit
`65.6
`PBT
`60.9
`HSBC EPS
`57.8
`Ratios (%)
`
`Revenue/IC (x)
`1.7
`ROIC
`24.6
`ROE
`27.6
`ROA
`16.4
`EBITDA margin
`23.2
`Operating profit margin
`20.5
`EBITDA/net interest (x)
`82.9
`Net debt/equity
`10.2
`Net debt/EBITDA (x)
`0.2
`CF from operations/net debt
`192.8
`Per share data (INR)
`
`EPS reported (fully diluted)
`29.44
`HSBC EPS (fully diluted)
`28.46
`DPS
`4.01
`Book value
`116.58
`
`
`2
`
`03/2014e
`
`03/2015e
`
`03/2016e
`
`113,379
`28,780
`-2,550
`26,230
`-200
`28,430
`28,430
`-9,666
`18,413
`16,664
`
`14,758
`-5,000
`-5,350
`-3,666
`-5,742
`7,358
`
`9,927
`25,632
`69,702
`10,111
`105,261
`26,506
`9,739
`-373
`66,789
`68,643
`
`03/2014e
`
`18.1
`29.2
`33.2
`47.7
`30.7
`
`1.8
`27.2
`28.0
`19.7
`25.4
`23.1
`143.9
`-0.6
`0.0
`
`
`41.12
`37.21
`6.80
`149.15
`
`128,444
`32,381
`-2,800
`29,581
`-330
`30,251
`30,251
`-9,983
`19,888
`19,888
`
`16,849
`-4,500
`-4,880
`-4,375
`-7,594
`11,349
`
`9,927
`27,332
`84,290
`15,706
`121,548
`29,280
`7,740
`-7,966
`82,302
`76,562
`
`03/2015e
`
`13.3
`12.5
`12.8
`6.4
`19.3
`
`1.8
`27.5
`26.7
`18.1
`25.2
`23.0
`98.1
`-9.6
`-0.2
`
`
`44.41
`44.41
`8.11
`183.79
`
`144,900
`37,059
`-3,200
`33,859
`-350
`35,509
`35,509
`-11,008
`24,101
`24,101
`
`17,031
`-4,500
`-4,900
`-5,302
`-6,829
`10,531
`
`9,927
`28,632
`101,452
`20,536
`140,011
`30,943
`5,741
`-14,795
`101,100
`88,532
`
`03/2016e
`
`12.8
`14.4
`14.5
`17.4
`21.2
`
`1.8
`28.5
`26.3
`19.0
`25.6
`23.4
`105.9
`-14.5
`-0.4
`
`53.82
`53.82
`9.83
`225.77
`
`Page 2 of 11
`
`

`

`Lupin (LPC IN)
`Pharmaceuticals
`3 February 2014
`
`
`abc
`
`
`Earning call highlights
`
` Robust US sales drove the 3Q growth; outlook remains strong
`with visible big launches in near-term
` Investment in long-term growth drivers continues – Nanomi
`acquisition for complex injectables
` Japan expected to recover in FY15; India to remain stable and
`RoW to maintain steady growth ahead
`
` 3QFY14 highlights
`US sales: 3QFY14 US sales grew 15% in USD-
`terms to USD215m due to traction in key recent
`launches such as: gCymbalta, gTrizivir,
`gZymaxid, and gTriLipix etc. Lupin gained from
`lower than expected competition in gCymbalta,
`which was a shared exclusivity product.
`
`Branded products contributed cUSD24m towards
`total US sales, primarily by the Suprax franchise,
`which is seeing a pick-up after a slow seasonal
`start. Suprax suspensions grew 28% while tablet
`sales grew 26% yoy. Recently launched Suprax
`drops have seen a slow start and Lupin expects a
`marketing push, post the end of flu season. Lupin
`continues to look out for acquisitions in branded
`product space and aspires towards a US sales
`contribution of 15-16% from branded products
`from current 10-11%.
`
`The US outlook remains strong with potential key
`launches like gNiaspan, gRenagel, and gRenvela
`in the near-term, supported by new launches and a
`pickup in its oral contraceptives sales. Lupin
`expects recent launches like gCymbalta, gTrizivir,
`gZymaxid, and gTrilipix to continue to do well in
`the near-term.
`
`Lupin filed five ANDAs in 3Q, taking the
`cumulative number to 186. Lupin has received
`five ANDA approvals during the quarter and now
`cumulative approvals stand at 96.
`
`Nanomi acquisition: On 3 February 2014, Lupin
`announced the acquisition of Nanomi B.V, which
`will provide it with the technical capabilities to
`enter the complex injectable space. Nanomi will
`bring with it technology platforms of microsphere
`and nano-particle, which have potential
`applications in the development of depot
`injection, peptides, ophthalmics, and respiratory
`products. At present, Lupin looks forward to use
`this technology for the development of complex
`injectable products and targets its first US filing in
`the next 3-3.5 years.
`
`Lupin hasn’t disclosed financial details of the
`Nanomi transaction.
`
`India: India sales grew 14% yoy in 3QFY14 to
`INR6.5bn. There is status quo on trade margin
`issues with the distributor though the market has
`settled down after the disruptions seen in recent
`quarters after the implementation of a new
`pricing policy.
`
`
`
`3
`
`Page 3 of 11
`
`

`

`Lupin (LPC IN)
`Pharmaceuticals
`3 February 2014
`
`
`abc
`
`
`Japan: Japan sales at INR3.7bn were flat on yoy
`(1.7% yoy growth) due to continued weakness in
`I’rom sales on the back of a contraction in contract
`manufacturing business and JPY movement against
`INR. Excluding I’rom, Japan sales were up 16% yoy
`in JPY-terms. Lupin expects better sales from I’rom
`in FY15. The Japanese government is expected to
`announce a new drug pricing policy by the end of
`February 2014, which will be implemented from the
`beginning of April 2014. Japan will see patent
`expiries worth USD14-15bn in the next two years
`and the government is yet to announce new generic
`conversion rules as per Lupin.
`
`R&D: R&D as % of sales was 9% in 3Q. The
`company expects this run rate to be sustained as it
`plans to step up niche complex filings in the US.
`
`Tax: The tax rate in 3Q came at 34.4%. Lupin
`expect tax rate to remain at 33-34% level of which
`2% is on account of taxes on dividend received from
`subsidiaries, which it booked during 2QFY14. For
`FY15, the company expects the tax rate to remain at
`a similar 33-34% level.
`
`Forex and hedges: The net forex impact on 3Q net
`profit was a loss of INR688m of which an INR255m
`gain is included in other income. There is a
`translation loss of cINR250m on account of the
`Japan entity, booked against raw material expenses.
`The remaining forex impact was captured in various
`line-items of the P&L.
`
`As per current hedges, the company has covered 30-
`50% of net foreign currency exposure for the next
`12-18 months. Lower hedges should help in better
`
`realizations of INR depreciation as per the company.
`Lupin recently filed gProlensa
`Lupin has been sued by Bausch and Lomb and
`Senju Pharma on bromfenac ophthalmic solution.
`Bromfenac is an ocular non-steroidal anti-
`inflammatory drug in the US market for use after
`the cataract surgery. The product was approved only
`last year in April 2013 (was successor of previous
`drug Xibrom) and is only protected by a single
`patent that expires in 2025. New product exclusivity
`ends in April 2016. The compound patent expired in
`March 2012.
`
`The other known formulation of the molecule but at
`different strength of 0.09% (Bromday) is already
`generic by two companies Hi Tech and Mylan
`(partner with Coastal Pharma). Lupin was sued on
`the most advanced formulation - 0.07% strength,
`which is sold in US as Prolensa and has MAT sales
`of cUSD30m for now. We believe this will grow in
`sales as it is a new product and can reach peak of
`cUSD100m in two to three years.
`
`Lupin is only known filer until now on this and
`hence is possibly FTF. We expect a generic entry in
`2016 when new product exclusivity expires.
`
`This ANDA filing increases ophthalmic filings for
`Lupin. One ophthalmic product gZymaxid
`(gatifloxacin) is already launched in the US market,
`which was a big contributor in 3Q. Its pipeline of
`ophthlamic drugs as per our estimates includes -
`moxifloxacin (Vigamox, Moxeza), bromfenac
`(Prolensa, Bromday), ketorolac (Acular LS),
`bimatoprost (Lumigan) and gatifloxacin (Zymar).
`
`
`
`Lupin: Change in estimates
`(INRm)
` _________ New estimates __________
`
`FY14e
`FY15e
`FY16e
`Net revenues
`113,379
`128,444
`144,900
`EBITDA
`28,780
`32,381
`37,059
`Net Profit
`16,664
`19,888
`24,101
`EPS (INR)
`37.2
`44.4
`53.8
`Source: HSBC estimates
`
`4
`
` _________ Old estimates __________
`FY14e
`FY15e
`FY16e
`109,962
`125,427
`141,537
`27,396
`30,167
`34,791
`15,924
`20,183
`23,255
`35.6
`45.1
`51.9
`
` ______ % change in estimates ______
`FY14e
`FY15e
`FY16e
`3.1%
`2.4%
`2.4%
`5.1%
`7.3%
`6.5%
`4.7%
`-1.5%
`3.6%
`4.7%
`-1.5%
`3.6%
`
`Page 4 of 11
`
`

`

`Lupin (LPC IN)
`Pharmaceuticals
`3 February 2014
`
`
`abc
`
`
`Valuation and risks
`We remain OW on Lupin as we believe the
`fundamental growth drivers are intact. Filings in
`US are scaling up in ophthalmic and dermatology
`and will be seen in future in controlled substances
`and inhalational products. The US outlook
`remains robust on back of pending launches like
`gYaz, gRenvela (FTF on suspension), gRenagel
`(FTF), gNiaspan in next 12 months. New brand
`additions Alinia and Locoid suspension will also
`add to the US growth.
`
`We roll forward our TP to Dec-14 from Sep-14
`and value Lupin at 21x (unchanged, 5% premium
`to sector average) Dec-15 EPS of INR51.5 to
`arrive at new TP of INR1,081 (from INR1,055).
`We believe a 5% premium to sector average is
`justified in view of the strong US outlook and the
`continued focus on niche therapies.
`
`Key risks are slow approvals in US and a delay in
`the recovery in I’rom in Japan.
`
`Under our research model, for stocks without a
`volatility indicator, the Neutral band is 5
`percentage points above and below the hurdle rate
`for Indian stocks of 11.0%. Our new target price
`of INR1,081 implies a potential return of 18%
`including a forecast dividend yield of 0.7%, which
`is above the Neutral band of our model; therefore,
`we rate the stock OW. Potential return equals the
`percentage difference between the current share
`price and the target price, including the forecast
`dividend yield when indicated.
`
`
`
`
`
`
`5
`
`Page 5 of 11
`
`

`

`
`abc
`
`
`3QFY13
`
`y-o-y
`
`2QFY14
`
`20.8%
`19.8%
`19.7%
`16.3%
`27.8%
`22.3%
`-45.6%
`-7.5%
`33.0%
`20.1%
`
`42.0%
`42.0%
`
`25,011
`9,357
`3,165
`6,440
`6,049
`265
`77
`688
`5,550
`2,116
`-82
`3,352
`3,352
`
`37.4%
`12.7%
`25.7%
`24.2%
`22.2%
`38.1%
`13.4%
`
`26,679
`8,413
`3,682
`7,988
`6,596
`814
`49
`606
`6,755
`2,582
`-111
`4,062
`4,062
`
`31.5%
`13.8%
`29.9%
`24.7%
`25.3%
`38.2%
`15.2%
`
`q-o-q
`
`13.3%
`33.2%
`2.9%
`-6.2%
`17.2%
`-60.2%
`-14.8%
`5.1%
`9.2%
`-1.6%
`
`17.2%
`17.2%
`
`
`
`
`
`
`
`
`
`3QFY14e Actual vs HSBC
`est.
`6.1%
`19.2%
`-1.9%
`-6.9%
`7.8%
`116.1%
`-40.6%
`-7.4%
`12.3%
`17.2%
`
`11.1%
`11.1%
`
`28,488
`9,401
`3,861
`8,050
`7,176
`150
`70
`688
`6,569
`2,168
`-115
`4,286
`4,286
`
`33.0%
`13.6%
`28.3%
`25.2%
`23.1%
`33.0%
`15.0%
`
`3QFY14e Actual vs HSBC
`est.
`4.9%
`-3.4%
`14.5%
`-5.8%
`-1.4%
`-7.9%
`5.7%
`20.3%
`6.3%
`-7.6%
`6.1%
`
`25,595
`6,735
`11,849
`3,951
`997
`718
`1,345
`2,471
`28,066
`422
`28,488
`
`3QFY13
`
`22,306
`5,708
`10,390
`3,658
`831
`598
`1,121
`2,353
`24,659
`352
`25,011
`
`y-o-y
`
`20.4%
`13.9%
`30.6%
`1.7%
`18.3%
`10.5%
`26.9%
`26.3%
`21.0%
`10.9%
`20.8%
`
`2QFY14
`
`23,453
`6,635
`10,349
`3,093
`1,004
`741
`1,631
`2,862
`26,315
`364
`26,679
`
`q-o-q
`
`14.5%
`-2.0%
`31.1%
`20.3%
`-2.1%
`-10.8%
`-12.8%
`3.9%
`13.4%
`7.2%
`13.3%
`
`Lupin (LPC IN)
`Pharmaceuticals
`3 February 2014
`
`Lupin 3QFY14 earnings summary
`(INRm)
`3QFY14
`
`Net revenue
`Raw materials
`Staff cost
`Other expenses
`EBITDA
`Other income
`Net interest
`Depreciation
`PBT
`Tax
`Minority interest
`Adj. Net Profit
`Reported Net Profit
`Margin analysis
`Raw Materials
`Staff Cost
`Other expenses
`EBITDA
`PBT
`Tax Rate (%)
`Net profit (adj.)
`Source: Company data, HSBC estimates
`
`
`30,220
`11,209
`3,787
`7,490
`7,733
`324
`42
`637
`7,379
`2,542
`-76
`4,761
`4,761
`
`37.1%
`12.5%
`24.8%
`25.6%
`24.4%
`34.4%
`15.8%
`
`
`
`
`
`
`
`
`
`Lupin 3QFY14 sales split
`(INRm)
`
`3QFY14
`
`26,857
`Formulations
`6,504
`Domestic
`13,567
`US
`3,720
`Japan
`983
`South Africa
`661
`EU
`1,422
`RoW
`2,973
`Bulk
`29,830
`Total sales
`390
`Other Op income
`30,220
`Net Revenue
`Source: Company data, HSBC estimates
`
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`Lupin (LPC IN)
`Pharmaceuticals
`3 February 2014
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`Disclosure appendix
`
`Analyst Certification
`The following analyst(s), economist(s), and/or strategist(s) who is(are) primarily responsible for this report, certifies(y) that the
`opinion(s) on the subject security(ies) or issuer(s) and/or any other views or forecasts expressed herein accurately reflect their
`personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific
`recommendation(s) or views contained in this research report: Girish Bakhru
`Important disclosures
`Equities: Stock ratings and basis for financial analysis
`HSBC believes that investors utilise various disciplines and investment horizons when making investment decisions, which
`depend largely on individual circumstances such as the investor's existing holdings, risk tolerance and other considerations.
`Given these differences, HSBC has two principal aims in its equity research: 1) to identify long-term investment opportunities
`based on particular themes or ideas that may affect the future earnings or cash flows of companies on a 12 month time horizon;
`and 2) from time to time to identify short-term investment opportunities that are derived from fundamental, quantitative,
`technical or event-driven techniques on a 0-3 month time horizon and which may differ from our long-term investment rating.
`HSBC has assigned ratings for its long-term investment opportunities as described below.
`
`This report addresses only the long-term investment opportunities of the companies referred to in the report. As and when
`HSBC publishes a short-term trading idea the stocks to which these relate are identified on the website at
`www.hsbcnet.com/research. Details of these short-term investment opportunities can be found under the Reports section of this
`website.
`
`HSBC believes an investor's decision to buy or sell a stock should depend on individual circumstances such as the investor's
`existing holdings and other considerations. Different securities firms use a variety of ratings terms as well as different rating
`systems to describe their recommendations. Investors should carefully read the definitions of the ratings used in each research
`report. In addition, because research reports contain more complete information concerning the analysts' views, investors
`should carefully read the entire research report and should not infer its contents from the rating. In any case, ratings should not
`be used or relied on in isolation as investment advice.
`Rating definitions for long-term investment opportunities
`Stock ratings
`HSBC assigns ratings to its stocks in this sector on the following basis:
`
`For each stock we set a required rate of return calculated from the cost of equity for that stock’s domestic or, as appropriate,
`regional market established by our strategy team. The price target for a stock represents the value the analyst expects the stock
`to reach over our performance horizon. The performance horizon is 12 months. For a stock to be classified as Overweight, the
`potential return, which equals the percentage difference between the current share price and the target price, including the
`forecast dividend yield when indicated, must exceed the required return by at least 5 percentage points over the next 12 months
`(or 10 percentage points for a stock classified as Volatile*). For a stock to be classified as Underweight, the stock must be
`expected to underperform its required return by at least 5 percentage points over the next 12 months (or 10 percentage points
`for a stock classified as Volatile*). Stocks between these bands are classified as Neutral.
`
`Our ratings are re-calibrated against these bands at the time of any 'material change' (initiation of coverage, change of volatility
`status or change in price target). Notwithstanding this, and although ratings are subject to ongoing management review,
`expected returns will be permitted to move outside the bands as a result of normal share price fluctuations without necessarily
`triggering a rating change.
`
`
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`Lupin (LPC IN)
`Pharmaceuticals
`3 February 2014
`
`
`abc
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`*A stock will be classified as volatile if its historical volatility has exceeded 40%, if the stock has been listed for less than 12
`months (unless it is in an industry or sector where volatility is low) or if the analyst expects significant volatility. However,
`stocks which we do not consider volatile may in fact also behave in such a way. Historical volatility is defined as the past
`month's average of the daily 365-day moving average volatilities. In order to avoid misleadingly frequent changes in rating,
`however, volatility has to move 2.5 percentage points past the 40% benchmark in either direction for a stock's status to change.
`Rating distribution for long-term investment opportunities
`As of 03 February 2014, the distribution of all ratings published is as follows:
`Overweight (Buy)
`44%
`(33% of these provided with Investment Banking Services)
`Neutral (Hold)
`38%
`(33% of these provided with Investment Banking Services)
`Underweight (Sell)
`18%
`(30% of these provided with Investment Banking Services)
`
`
`
`Share price and rating changes for long-term investment opportunities
`Lupin (LUPN.BO) Share Price performance INR Vs HSBC rating history
` Recommendation & price target history
`From
`Overweight
`Neutral
`Target Price
`Price 1
`Price 2
`Price 3
`Price 4
`Price 5
`Price 6
`Price 7
`Price 8
`Price 9
`Source: HSBC
`
`To
`Neutral
`Overweight
`Value
`530.00
`560.00
`610.00
`640.00
`650.00
`730.00
`860.00
`935.00
`1055.00
`
`Date
`25 July 2012
`24 October 2012
`Date
`12 May 2011
`09 November 2011
`10 May 2012
`25 July 2012
`24 October 2012
`31 January 2013
`08 May 2013
`08 August 2013
`30 October 2013
`
`
`
`Feb-14
`
`Feb-13
`
`Feb-12
`
`Feb-11
`
`Feb-10
`
`993
`893
`793
`693
`593
`493
`393
`293
`193
`93
`
`Feb-09
`
`Source: HSBC
`
`
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`Lupin (LPC IN)
`Pharmaceuticals
`3 February 2014
`
`
`abc
`
`
`HSBC & Analyst disclosures
`None of the below disclosures applies to any of the stocks featured in this report.
`1 HSBC has managed or co-managed a public offering of securities for this company within the past 12 months.
`2 HSBC expects to receive or intends to seek compensation for investment banking services from this company in the next
`3 months.
`3 At the time of publication of this report, HSBC Securities (USA) Inc. is a Market Maker in securities issued by this
`company.
`4 As of 31 December 2013 HSBC beneficially owned 1% or more of a class of common equity securities of this company.
`5 As of 31 December 2013, this company was a client of HSBC or had during the preceding 12 month period been a client
`of and/or paid compensation to HSBC in respect of investment banking services.
`6 As of 31 December 2013, this company was a client of HSBC or had during the preceding 12 month period been a client
`of and/or paid compensation to HSBC in respect of non-investment banking securities-related services.
`7 As of 31 December 2013, this company was a client of HSBC or had during the preceding 12 month period been a client
`of and/or paid compensation to HSBC in respect of non-securities services.
`8 A covering analyst/s has received compensation from this company in the past 12 months.
`9 A covering analyst/s or a member of his/her household has a financial interest in the securities of this company, as
`detailed below.
`10 A covering analyst/s or a member of his/her household is an officer, director or supervisory board member of this
`company, as detailed below.
`11 At the time of publication of this report, HSBC is a non-US Market Maker in securities issued by this company and/or in
`securities in respect of this company
`
`
`HSBC and its affiliates will from time to time sell to and buy from customers the securities/instruments (including derivatives)
`of companies covered in HSBC Research on a principal or agency basis.
`
`Analysts, economists, and strategists are paid in part by reference to the profitability of HSBC which includes investment
`banking revenues.
`
`For disclosures in respect of any company mentioned in this report, please see the most recently published report on that
`company available at www.hsbcnet.com/research.
`Additional disclosures
`1 This report is dated as at 03 February 2014.
`2 All market data included in this report are dated as at close 03 February 2014, unless otherwise indicated in the report.
`3 HSBC has procedures in place to identify and manage any potential conflicts of interest that arise in connection with its
`Research business. HSBC's analysts and its other staff who are involved in the preparation and dissemination of Research
`operate and have a management reporting line independent of HSBC's Investment Banking business. Information Barrier
`procedures are in place between the Investment Banking and Research businesses to ensure that any confidential and/or
`price sensitive information is handled in an appropriate manner.
`
`
`
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`Lupin (LPC IN)
`Pharmaceuticals
`3 February 2014
`
`
`abc
`
`
`Disclaimer
`
`Issuer of report
`HSBC Securities and Capital Markets
`(India) Private Limited
`Registered Office
`52/60 Mahatma Gandhi Road
`Fort, Mumbai 400 001, India
`Telephone: +91 22 2267 4921
`Fax: +91 22 2263 1983
`Website: www.research.hsbc.com
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