Understanding the Current Rating
MarketsMOJO’s 'Buy' rating for Lupin Ltd. indicates a positive outlook on the stock, suggesting it is a favourable investment opportunity based on a comprehensive evaluation of multiple factors. This rating reflects a balanced view of the company’s quality, valuation, financial trends, and technical indicators as they stand today. Investors should consider this rating as a signal that Lupin Ltd. offers attractive potential returns relative to its risks, supported by solid fundamentals and market positioning.
Quality Assessment
As of 09 February 2026, Lupin Ltd. maintains a good quality grade. The company’s financial health is underscored by a low average debt-to-equity ratio of 0.10 times, indicating prudent leverage management and a strong balance sheet. This low gearing reduces financial risk and provides flexibility for future growth initiatives. Additionally, Lupin’s return on equity (ROE) stands at a robust 22%, reflecting efficient utilisation of shareholder capital to generate profits. The company’s operating profit margin growth rate of 37.09% further highlights operational efficiency and effective cost management.
Valuation Perspective
The valuation grade for Lupin Ltd. is currently rated as very attractive. The stock trades at a price-to-book (P/B) ratio of 5, which, while seemingly elevated, is considered a discount relative to its pharmaceutical peers’ historical valuations. This suggests that the market may be undervaluing Lupin’s growth prospects and profitability. The company’s price-to-earnings-to-growth (PEG) ratio is a compelling 0.4, signalling that earnings growth is not fully priced into the stock. Such valuation metrics imply that Lupin offers investors a favourable entry point with potential for capital appreciation.
Financial Trend Analysis
Financially, Lupin Ltd. demonstrates a positive trend. The latest data as of 09 February 2026 shows net sales growing at an annualised rate of 10.57%, supported by strong operating profit growth of 37.09%. The company’s profit before tax (PBT) excluding other income for the quarter ending September 2025 surged by 82.3% compared to the previous four-quarter average, signalling accelerating profitability. Return on capital employed (ROCE) reached a high of 22.22% in the half-year period, indicating effective capital utilisation. Furthermore, the operating profit to interest coverage ratio stands at an impressive 21.76 times, reflecting strong earnings capacity to service debt obligations.
Technical Outlook
From a technical standpoint, Lupin Ltd. is rated as mildly bullish. The stock has delivered steady returns over recent periods, with a 3-month gain of 11.01% and a 6-month increase of 14.18%. Year-to-date, the stock has appreciated by 3.62%, while the one-year return is slightly negative at -0.85%, reflecting some volatility but overall resilience. The recent daily price change of +0.93% indicates positive momentum. High institutional holdings at 47.08% further support the stock’s technical strength, as these investors typically have the resources and expertise to assess fundamentals and provide stability to the share price.
What This Rating Means for Investors
For investors, the 'Buy' rating on Lupin Ltd. suggests that the stock is expected to outperform the broader market or its sector peers over the medium term. The combination of strong quality metrics, attractive valuation, positive financial trends, and supportive technical signals provides a compelling case for inclusion in a diversified portfolio. However, investors should remain mindful of sector-specific risks and broader market conditions that could impact performance.
Sector and Market Context
Lupin operates within the Pharmaceuticals & Biotechnology sector, a space characterised by innovation, regulatory scrutiny, and competitive pressures. The company’s midcap status positions it well to benefit from growth opportunities while maintaining operational agility. Compared to the broader market, Lupin’s fundamentals and valuation metrics stand out positively, making it an appealing choice for investors seeking exposure to healthcare with a growth orientation.
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Institutional Confidence and Shareholder Base
Institutional investors hold a significant 47.08% stake in Lupin Ltd., reflecting strong confidence from knowledgeable market participants. This level of institutional ownership often correlates with greater stock liquidity and reduced volatility, as these investors tend to conduct thorough due diligence before committing capital. Their presence can also provide a stabilising influence during market fluctuations, benefiting retail investors.
Recent Financial Highlights
The company’s recent quarterly results reinforce the positive outlook. The profit before tax excluding other income reached ₹1,916.97 crores in the September 2025 quarter, marking an 82.3% increase over the previous four-quarter average. This surge in profitability is complemented by the highest recorded ROCE of 22.22% in the half-year period, underscoring Lupin’s efficient capital deployment. The operating profit to interest coverage ratio of 21.76 times further highlights the company’s strong earnings relative to its debt servicing requirements, indicating financial robustness.
Stock Performance Snapshot
As of 09 February 2026, Lupin Ltd.’s stock performance reflects steady gains over multiple time horizons. The stock has appreciated by 0.93% in the last trading day and 2.81% over the past week. Monthly and quarterly returns stand at +0.32% and +11.01% respectively, while the six-month return is a healthy +14.18%. Year-to-date gains of 3.62% demonstrate positive momentum, although the one-year return is slightly negative at -0.85%, indicating some recent volatility but overall resilience in the stock price.
Conclusion
In summary, Lupin Ltd.’s current 'Buy' rating by MarketsMOJO is supported by a combination of strong quality fundamentals, very attractive valuation, positive financial trends, and a mildly bullish technical outlook. Investors looking for exposure to the Pharmaceuticals & Biotechnology sector may find Lupin an appealing candidate given its solid growth prospects, disciplined financial management, and favourable market positioning. The rating reflects a balanced assessment that encourages investors to consider Lupin Ltd. as a worthwhile addition to their portfolios based on the latest data as of 09 February 2026.
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