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Informist, Wednesday, Aug 7, 2024

By Apoorva Choubey 

MUMBAI – Robust performance of the high-margin US business and stronger-than-expected growth of Indian operations helped Lupin Ltd surpass estimates for Apr-Jun earnings on all metrics--net profit, sales, and operating margin. The drugmaker's consolidated net profit surged 77.2% on year to 8.01 bln rupees for the June quarter.

The company's bottomline not only exceeded the average estimate of 5.48 bln rupees given by 12 brokerages, but profit after tax also beat the most optimistic of projections, which was 6.23 bln rupees. The outperformance for Apr-Jun catapulted the company's shares to levels of 2,029.95 rupees, the highest level in nearly nine years. The stock ended today's session slightly off highs at 1,994.45 rupees, up over 4% on the National Stock Exchange.        

During the June quarter, Lupin's revenue from operations jumped 16.3% from a year ago to 56 bln rupees. Analysts had expected a topline of 52.26 bln rupees. Sequentially, the net profit surged over twofold while total revenue rose 13%. 

The high-margin North American market, mostly comprising the US, is the most important region for Lupin as it accounts for 37% of the total revenue pie but is deemed to be a bigger contributor to overall profitability. For Apr-Jun, the company's North American sales soared 25% on year to $227 mln. 

Strong traction in niche launches such as Spiriva and new launches like Mirabegron drove US sales, even as higher competition in Suprep weighed on the overall revenue from the region. The drugmaker has been able to achieve its quarterly revenue run rate of $200 mln in the US over the last two-three quarters.

The growth in high-margin US sales and new launches led to a better product mix for the company, which, in turn, boosted profitability for the June quarter. Operating margin, defined as earnings before interest taxes, depreciation and amortisation, expanded 520 basis points on year to 23.7%.

The other big market for the company, India, saw sales jump 17.5% from a year ago to 19.3 bln rupees during the June quarter. The growth was higher than the 8-13% sales rise expected by analysts.

The sales growth was underpinned by the core portfolio and higher field force activity. The region accounted for 35% of the company's overall topline.

Among other regions, Latin America and Asia Pacific markets, which the company terms "growth markets", saw sales surge 27% on year to 5.15 bln rupees for Apr-Jun. Europe, West Asia, and Africa witnessed revenues jump 26% to 5 bln rupees.

For Apr-Jun, research and development expenses were 3.5 bln rupees, amounting to 6.3% of sales. The R&D spend was 3.7 bln rupees, or 7.8% of sales, during the year-ago period. 

The company's other income for Apr-Jun soared to 677.8 mln rupees from 228.3 mln rupees a year ago. In Apr-Jun, total expenditure, including finance costs, rose to 46.75 bln rupees from 42.78 bln rupees a year ago.

Finance costs fell to 680.1 mln rupees from 856.7 mln rupees a year ago. The company's tax outgo for the June quarter was 1.87 bln rupees, against 1.05 bln rupees a year ago.  End

US$1 = 83.95 rupees

Edited by Deepshikha Bhardwaj

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