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Informist, Wednesday, Feb. 12, 2025

 

--Lupin Apr-Dec consol net profit INR 25.09 bln vs INR 15.55 bln yr ago
--Lupin Apr-Dec consol revenue INR 170.41 bln vs INR 150.50 bln yr ago
--Lupin Oct-Dec consol revenue INR 57.68 bln vs INR 51.97 bln yr ago
--Lupin Oct-Dec consol net profit INR 8.55 bln vs INR 6.13 bln yr ago
--Analysts saw Lupin Oct-Dec consol net profit INR 7.86 bln
--Lupin Oct-Dec consol net profit INR 8.55 bln

 

By Sunil Raghu

 

AHMEDABAD– Lupin Ltd. surpassed the Street's expectations for net profit and top line for the December quarter, after a similar performance in Jul-Sept. The company's earnings for Oct-Dec were reinforced by healthy sales in the two important markets for the company – US and India. The US was the largest contributor to the company's earnings for Oct-Dec, followed by its Indian operations.

 

The Mumbai-based drugmaker's consolidated net profit for Oct-Dec jumped 39.48% on year to INR 8.55 billion, higher than the consensus average estimate of INR 7.86 billion. During Oct-Dec, Lupin's consolidated revenue from operations rose 10.97% from a year ago to INR 57.68 billion. The Street had projected sales at INR 56.84 billion.

 

The operating margin, defined as earnings before interest, tax, depreciation and amortisation, expanded 408 basis points on year to 25.1%. Lupin's consolidated EBITDA for the December quarter was seen up 25% on year but marginally down sequentially at INR 12.80 billion, according to brokerage firms. The consolidated operating profit jumped 32.1% from a year ago to INR 14.10 billion.

 

"Our third quarter results highlight our continued strength, with both revenue and EBITDA showing sustained growth," Managing Director Nilesh Gupta said in a press release. "US revenues led by building scale in new products have been pivotal for our growth, supported by a strong nine-month performance from our India and Europe, West Asia, Africa, or EMEA, regions. We look forward to maintaining this momentum in the ensuing quarters backed by growth in sales, commercial and operating efficiencies, and strong compliance," he said.

 

The company's revenue growth was the slowest on a year-on-year basis in the last eight quarters, while the rise in net profit is slower than in the previous five quarters.

 

SEGMENTS

One of the highlights of Lupin's December quarter earnings was the performance of the India business, which accounted for 34% of the overall sales. India formulation sales in Oct-Dec rose 12% to INR 19.31 billion, likely driven by the diabetes segment, which grew 10.9%, and higher field force activity.

 

The other big market for the company, the US, also fared well. For Oct-Dec, the company's US sales rose 12% on year to INR 21.21 billion. The high-margin North American business, which largely comprises US operations, is an important market for Lupin as it accounts for around 38% of the total revenue pie, and is deemed to be a bigger contributor to overall profitability.

 

The company expects to grow the US business in high single digits during 2024-25 (Apr-Mar). For the medium term, Lupin aims to clock $1 billion in US sales by FY26, with the help of launches of pancreatic hormone drug Glucagon and asthma medication Dulera.

 

Sales from the region during Oct-Dec came in at $235 million in dollar terms, up from $212 million a year ago. The growth was driven by new product launches and higher volumes in base products, the company said in an investor presentation accompanying the Oct-Dec earnings. Earlier this year, the drugmaker had guided for a quarterly revenue run rate of over $200 million in the US.

 

Revenue from the Latin American and Asia-Pacific region fell 5% on year to INR 4.51 billion, while Lupin's sales in Europe, Africa and West Asia surged 21% on year to INR 6.25 billion during the December quarter. Revenue from the global active pharmaceutical ingredient segment improved 4% from a year ago to INR 2.9 billion.

 

OTHER METRICS 

The drugmaker's total expenses rose 5.78% on year to INR 47.50 billion in Oct-Dec, as employee costs and other expenses rose and a currency-related loss offset the drop in cost of materials consumed. Employee benefit costs rose 10.7% on year to INR 9.84 billion. Employee costs were 17.5% of sales, according to the company's press release.

 

Raw material costs fell 2.05% on year to INR 10.84 billion during the quarter. Manufacturing and other expenses rose 8.7% to INR 16.96 billion, accounting for 30.2% of sales. The total capital expenditure by the company in Oct-Dec stood at INR 1.24 billion.

 

Research and development spending during the quarter was INR 4.34 billion, accounting for 7.7% of sales. In the same quarter a year ago, the company had spent INR 3.57 billion or 7.0% of sales on R&D.

 

On a quarter-on-quarter basis, the company's net profit for Oct-Dec rose just 0.3%, while net sales were 1.67% higher. For Apr-Dec, Lupin's revenue rose 13.23% to INR 170.41 billion, while the net profit jumped 61.35% to INR 25.09 billion.

 

As on Dec. 31, the company's operating working capital was INR 70.70 billion, net debt INR 1.03 billion, and net debt-equity at 0.01.

 

On Tuesday, shares of Lupin closed at INR 2,067.60 on the National Stock Exchange, down 4.7%. The company released its earnings for the December quarter after market hours.  End

 

US$1 = INR 86.51

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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