Lupin Exit or Hold

I bought Lupin from May 2014 to Oct 2015 in tranches and getting 35% absolute return on my whole investment. Now it's sensible to hold or sell and invest in untapped Small Cap, Mid Cap ? Love to hear your suggestions

 

if you do not need the money and do not have a better alternative investment idea you can hold it. Anyways its trading at 52 weeks low but I hold the stock so my views maybe biased. you may get some alternative idea.

 

I think Lupin might see a bit of pressure in the near term because of uncertainty in regulatory issues. I'd suggest you book the profit and get in at lower levels. Large cap pharma stocks seem to be under FDA radar and succumbing under that pressure. My suggestion would to book out and wait for the headwinds to go away, otherwise it would eat into your profits.

 

Exit given by Motilal Oswal

 

Lupin a great growth story reached 2115 in April at a PE of about 40 anticipating the stupendous growth shall continue ,,,

Unfortunately the last few Quarters the growth is slumping ... But it is a great company ...

Future is anybody's guess ... Now we have to book the profit and out

 

Yembee Ji,
you are determined to prove me wrong. Whats the harm in keeping a company of this potential ? Also at 52 week low I would not sell if not buy. Also the annual results are not very far. It is still held by many marquee investors A portfolio must have few good stocks of high quality. From the pharma sector Lupin is one good stock. USFDA issues have hit all companies but so far Lupin has received no warnings forget a import alert or ban.

 

/// Actually I have started a thread on value investing where I am writing about select stocks. I was planning to write about Lupin there and why it makes sense to buy Lupin. Tomorrow I would share my views. Maybe you can write why you sold it ? It is always nice when you have somebody shares a logical counter argument which is based on facts. I am sure the forum members will like this.///

@bholuji whom am I to prove you wrong ... I came here at your invitation now u are throwing stone at ,,,
Can you doubt Motilal Oswals wisdom too ...

 

No Yembee Ji,

I like your approach. I am not throwing any stones at you. In fact I find the statement funny, really humorous and quite harmless. Its just the timing of your posts that make me wonder. However I admit I did ask you to present your logic of not investing in Lupin and you (like everybody else) are free to share your views. But if the logic is in the chart I am really sorry I did not understand it. You have to explain.
Also Motilal Oswal or Warren Buffet or Porinju, the market has humbled everybody.

 

@bholu I agree it is a great company. But like many say, a great company might not be a great stock. If you are here to get good return, then wait for the stock to correct to a level where it becomes attractive. Lupin is not going anywhere I think so too, but we have seen markets dumping stocks irrationally and really beating the stock price down. I felt that jolt in Eros, when it corrected from 445 to 120 odd levels. I am still buying and I am bullish on it in the long term, but I would have liked to wait it out to buy at 120 levels. Instead I bought at 270 and 220 levels. So giving you my experience.

 

Yes Bholuji Market is a leveler... I understand what you are trying to say... I am in the process of correlating the Technical Indicators and Fundamentals ... This Lupin slide fit very well to the hypothesis that Technicals foretell the impending fundamental deterioration

 

Well, I am not selling Lupin. Regardless of what anybody says. As Salman Khan said in one film "Ekbaar jo maine commitment kar di to apne aap ki bhi nahin sunta hoon" or Akshay Kumar in Rowdy Rathore "Jo main bolta hoon woh main karta hoon , Jo main nahin bolta hoon woh main definitely karta hoon."

 

Very good point Lupin is blue chip it will recover 100%

 

Agreed Lupin is a great company... It will recover ....
Market gives 40PE rating to a company which is expected to grow 30/40% ...
In the unlikely unfortunate event of one more dull year may bring the stock much further down...

But yes It will recover ... For those who have unlimited patience and Investing capital can hold and add more at 52 week lows ...( 52 week low is not a static no )

 

In my view Motilal oswal is not invested in Lupin and are invested in other Pharma stocks.So panic in Lupin can be helpful to other Pharma stocks,we should never forget.In my view all front line Pharma compnies are good investments specialy if you invest in them during negative sentiments,USFDA issues are God sent opportunities for long term investers to buy cheap.

 

Self explanatory ...
% fund value invested in Lupin

 

Pain ...
https://economictimes.indiatimes.co...-for-mandideep-plant/articleshow/51598481.cms

 

Well Done Yembee Ji,

you were right. Among all analysts who gave targets for Lupin you managed to predict the outcome correctly. if you do not mind may I ask how did you predict this ? Was the basis a technical analysis or you had information about USFDA observations. It appears a section of the market were clearly aware that this information was coming.

 

I feel that USFDA letters are definitely going to push the valuations down in the pharma space. Call it sentimental or fundamental, but there seems to be a bit of pressure on the pricing due to uncertainty of the revenues coming from US/exports. I am looking at pharma companies which have bigger exposure in India/Asia/Africa rather than the west. I think Alkem has a big exposure to India in terms of their revenues and is also quoting at better valuations than Lupin etc. If pressure comes on pharma sector as a whole, then that stock should be a good buy. Specialty chemical companies supplying to pharma co.s can be a proxy play to the pharma sector too. I like Alkem, Shilpa, Aarti drugs due to focus in Indian domestic market.

 

Lupin is a better stock in all regards. I reviewed the company as much I could. We really do not know what the conclusion of USFDA observations will be. I take confidence from the fact that there were no data integrity issues or "serious" concerns as reported by media. I do hope the Indian pharma industry realizes that quality can not be comprimised . But we need to applaud the action of USFDA for trying to ensure the best manufacturing practices and accurate proceeses are followed. When will Indian regulators do something? When will they show seriousness ? But where is Yembee "the analyst of the moment"?

 

Bholu ji ... //Yembee "the analyst of the moment"?// Whether it is real appreciation or Sarcasm I thank you ...

I have highlighted in the table I published that the PAT and Sales for the trailing four Quarters are slumping and the people who were willing to give a 45-50 PE will book profit and will be out... That was my calculation....

Lupin is a very good company . Market overdoes both up an down ... If it goes down to a bog discount to its fair value I will buy again....

Yes TA gives a leading Indication of things to come...