Near term pressure to persist; stock factoring most of the negatives: LPC has invested ~INR60b on R&D between FY16-18E (much higher than what it invested in a decade prior to that). GMP compliance is key to monetize this investment. Though in near term stock will remain under pressure, key approvals in US and resolution of WL status (expected in 12 months) will help create value in 12-18 months. We maintain Buy with a TP of INR1,000 @ 20x1H FY20E PER (vs INR1,215 @21x 1H FY20E PER). We have cut FY19E EPS by ~17% as we build impact of WL at Goa and Indore (Unit-2).
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Motilal Oswal was founded in 1987 as a small sub-broking unit, with just two people running the show. Today it has a 2000 member team with a networth of Rs7 bn and market capitalization as of March 31, 2008 at Rs19 bn.
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