Earnings Outlook
Lupin Oct-Dec revenue growth may be slowest in 8 quarters
This story was originally published at 21:08 IST on 8 February 2025
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By Aman Aryan
MUMBAI – Although sales of Lupin Ltd. in the US are expected to see strong on-year growth for the December quarter, the company is expected to report the slowest revenue growth in eight quarters. This is despite the benefit arising from an over 2% depreciation in the rupee against the dollar since the end of the previous quarter. The US market accounted for nearly 36% of the total sales during the September quarter, according to the company's investor presentation.
While its profit growth is expected to slow during the quarter, Lupin's consolidated net profit for the December quarter is expected to be the second-best in at least five years, according to the data available with Informist. The pharmaceutical company's consolidated net profit is seen up 28% on year at INR 7.86 billion for the December quarter, according to an average of estimates from 13 brokerage firms. The estimates for the net profit range from INR 6.98 billion by Yes Securities (India) Ltd. to INR 9.33 billion by JM Financial Institutional Securities Pvt. Ltd.
Lupin's consolidated revenue for the quarter under review is seen up over 9% on year at INR 56.84 billion, an average of estimates from 13 brokerage firms showed. Emkay Global Financial Services Ltd. gave the lowest estimate of INR 55.25 billion, whereas JM Financial gave the highest estimate of INR 57.63 billion. Sequentially, the company's consolidated revenues are expected to remain nearly flat, while its net profit is seen down 8%.
Analysts across brokerage firms expect generics of Spiriva and Myrbetriq will drive sales of the company in the US. Sales in the US would likely have grown 14% on year to $242 million during the December quarter, led by strong traction in niche launches and new approvals, Motilal Oswal Financial Services Ltd. said in its earnings preview report.
The higher sales of the aforementioned drugs would likely also have offset the impact due to the competition in drugs such as Albuterol and Suprep, analysts said. Apart from this, the company is also expected to reap the benefits from the flu season in the US during the quarter, JM Financial said in its report.
The launch of three new molecules in the December quarter, including genric of Prolensa and that of Chantix, could add nearly $13 million of incremental sales for the company, Axis Securities said in its earnings preview report.
On the domestic sales front, HDFC Securities and Kotak Institutional Equities expect the company to post an on-year growth of 15% and 12%, respectively. Sales from Europe, Middle East, and Africa--which account for 10% of the total sales--are expected to grow 12% on year while from the rest of the world, except US and India, are expected at 4% on year, Kotak said.
Lupin's consolidated earnings before interest, tax, depreciation, and amortisation for the December quarter is seen up 25% on year but marginally down sequentially at INR 12.80 billion, according to an average from 12 brokerage firms.
While analysts believe the company will likely post an on-year growth in its EBITDA margin for the December quarter, Kotak and Emkay Global expect it to post a fall in the measure on a sequential basis due to an increased research and development expenditure. Kotak said Lupin's EBITDA margin for the December quarter will likely fall 110 basis points from the previous quarter.
The company will detail its earnings on Tuesday. Post results, investors and analysts will keenly watch for the growth in the company's domestic prescription business, according to Emkay Global.
Friday, shares of Lupin closed at INR 2,201.15 on the National Stock Exchange, up 0.7%. The stock is up 4.6% from the closing price on Nov. 8, a day after the company released its earnings for the September quarter after market hours.
Following are the Oct-Dec earnings estimates for Lupin based on reports compiled by Informist from 13 brokerages in descending order by the estimate of net profit:
| Brokerage Firms | Net Sales | Net profit | EBITDA |
| ----------(In INR million)------- | |||
| JM Financial Institutional Securities Pvt. Ltd. | 57,630.00 | 9,330.00 | 13,980.00 |
| Prabhudas Lilladher Pvt. Ltd. | 57,498.00 | 8,474.00 | 13,317.00 |
| Systematix Shares and Stocks (India) Ltd. | 57,034.00 | 8,440.00 | 13,309.00 |
| Nuvama Wealth Management Ltd. | 57,130.00 | 8,217.00 | 13,026.00 |
| PhillipCapital (India) Pvt. Ltd. | 56,588.00 | 8,003.00 | 13,064.00 |
| Axis Securities Ltd. | 57,470.00 | 8,000.00 | 12,800.00 |
| Sharekhan Ltd. | 56,800.00 | 7,800.00 | --- |
| Kotak Institutional Equities | 56,681.00 | 7,681.00 | 12,781.00 |
| Motilal Oswal Financial Services Ltd. | 57,448.00 | 7,556.00 | 12,466.00 |
| HDFC Securities Ltd. | 56,926.00 | 7,528.00 | 12,695.00 |
| Nirmal Bang Equities Pvt. Ltd. | 56,949.00 | 7,127.00 | 12,379.00 |
| Emkay Global Financial Services Ltd. | 55,251.00 | 7,029.00 | 11,996.00 |
| YES Securities (India) Ltd. | 55,534.00 | 6,979.00 | 11,728.00 |
| Average | 56,841.46 | 7,858.77 | 12,795.08 |
End
US$1 = INR 87.42
Edited by Deepshikha Bhardwaj
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