There was no respite for the Lupin stock post results. The scrip, which crashed 9 per cent on Friday, added another 3 per cent decline at ₹1,465.05 on the NSE.

On Monday, Lupin May Futures shed 11.35 lakh shares (or 26 per cent) in open interest positions. This signals bearishness as traders are unwinding their long positions.

Analysts are divided over the call on the stock after results, with buy, sell and hold calls.

Lupin, the country’s third-largest drug maker, reported a healthy net profit for the January-March quarter of ₹807 crore from ₹547 crore a year earlier. The better show was possible due to sale of a new diabetes drug it launched in the US.

However, Prabhudas Lilladher maintained its ‘reduce’ stance on the stock with a price target of ₹1,419. “We expect Lupin’s guidance for 15 per cent growth in domestic formulations sales (26 per cent contribution) in FY17 will be at risk of court verdict on the ban of wide range of fixed dose combination drugs,” said Prabhudas Lilladher.

I-Sec advises ‘add’ Similarly, Karvy Research downgraded the stock to ‘sell’ as it expects the company’s earnings to decline in FY17 and FY18 due to amortisation on account of Gavis acquisition.

However, ICICI Securities upgraded Lupin to ‘add’ from ‘reduce’ considering the expected pick up in US sales given its strong pipeline of filings and integration of Gavis; continuous outperformance in domestic formulations vs the industry; and a 22.6 per cent adjusted net profit CAGR over FY16-FY18.

“However, Form 483 issued on Lupin’s Goa plant would remain an overhang in the near term as about 30 ANDAs have been filed from this plant. We believe the current valuations already factor approval delays from the Goa plant to some extent,” ICICI Securities added.

Similarly, Motilal Oswal recommends a buy rating on Lupin. “Though higher R&D and depreciation should put pressure in the near term, Metformin opportunity coupled with Gavis inclusion and niche pending approvals in base business should help drive EPS growth.”

For Cholamandalam Securities, which maintains a market performer rating on the Lupin stock, new launches in the US are expected to propel the next leg of growth. Also the sustained healthy performance in domestic business is a positive for the company. However, the USFDA’s observations related to the Goa plant remain a cause for concern.

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