Current Rating and Its Significance
MarketsMOJO’s Buy rating for Lupin Ltd. indicates a positive outlook on the stock based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. This rating suggests that the stock is expected to deliver favourable returns relative to its peers and the broader market, making it a compelling option for investors seeking exposure to the Pharmaceuticals & Biotechnology sector.
Quality Assessment
As of 28 December 2025, Lupin Ltd. demonstrates strong quality metrics. The company maintains a low average Debt to Equity ratio of 0.10 times, reflecting prudent financial management and limited leverage risk. Its return on equity (ROE) stands at an attractive 22%, signalling efficient utilisation of shareholder capital. Additionally, the company’s operating profit margin has grown at an annual rate of 37.09%, underscoring robust operational performance. These factors contribute to the 'good' quality grade assigned by MarketsMOJO, highlighting Lupin’s solid business fundamentals and sustainable growth prospects.
Valuation Perspective
Currently, Lupin Ltd. is valued attractively relative to its sector peers. The stock trades at a Price to Book Value of 4.9, which is considered reasonable given the company’s strong profitability and growth trajectory. Despite a year-to-date return of -10.63% and a one-year return of -4.02%, the company’s profits have surged by 64.7% over the past year, indicating that the market has not fully priced in its earnings growth. The PEG ratio of 0.3 further suggests that the stock is undervalued relative to its earnings growth potential, making it an appealing choice for value-conscious investors.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend and Growth
The latest data shows Lupin Ltd. is on a positive financial trajectory. Net sales have grown at a compound annual rate of 10.57%, reflecting steady demand and market expansion. The company’s profit before tax excluding other income (PBT LESS OI) for the quarter ending September 2025 reached ₹1,916.97 crores, marking an impressive growth of 82.3% compared to the previous four-quarter average. Furthermore, the return on capital employed (ROCE) for the half-year period is at a high of 22.22%, indicating efficient capital utilisation. The operating profit to interest ratio stands at 21.76 times, underscoring strong earnings relative to debt servicing costs. These positive financial trends reinforce the Buy rating by signalling sustained profitability and operational strength.
Technical Outlook
From a technical perspective, Lupin Ltd. exhibits bullish characteristics. The stock has delivered a 3-month return of +9.38% and a 6-month return of +9.08%, indicating upward momentum in recent periods. Although the one-day and one-week returns show slight declines of -0.38% and -1.16% respectively, these short-term fluctuations are typical in equity markets and do not detract from the overall positive technical grade. The bullish technical rating suggests that the stock price is supported by favourable market trends and investor sentiment, which may provide additional confidence for prospective buyers.
Institutional Confidence
Another factor supporting the Buy rating is the high level of institutional ownership, currently at 47.05%. Institutional investors typically have greater resources and expertise to analyse company fundamentals, and their significant stake in Lupin Ltd. reflects confidence in the company’s prospects. This institutional backing can also contribute to stock price stability and liquidity, benefiting all shareholders.
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What This Rating Means for Investors
For investors, the Buy rating on Lupin Ltd. signals an opportunity to consider adding the stock to their portfolio, given its strong fundamentals, attractive valuation, positive financial trends, and supportive technical indicators. The rating reflects a balanced view that the company is well-positioned to generate shareholder value over the medium to long term. However, investors should also be mindful of sector-specific risks and broader market conditions that could impact performance.
Summary
In summary, Lupin Ltd.’s current Buy rating by MarketsMOJO, updated on 12 Nov 2025, is supported by a combination of good quality metrics, attractive valuation, positive financial trends, and bullish technical signals as of 28 December 2025. The company’s low leverage, strong profit growth, and institutional backing further enhance its investment appeal. While the stock has experienced some short-term price volatility, its underlying fundamentals remain robust, making it a noteworthy candidate for investors seeking exposure to the Pharmaceuticals & Biotechnology sector.
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