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Informist, Monday, Oct. 27, 2025

By Narayana Krishna

HYDERABAD - Strong growth in US sales led by new launches and market share gains in existing products is likely to boost Lupin Ltd.'s September quarter earnings on a year-on-year basis, though India sales may see moderate growth, according to analysts tracking the company. Given the robust growth of high-margin products in the US, the company's operating margins are also likely to expand significantly for the reporting quarter.

Lupin is expected to report a 37% on-year growth in its consolidated net profit for the September quarter to INR 11.6 billion while its revenue is seen increasing 15% on year to INR 65.2 billion, according to an average of estimates from 11 brokerages. The highest estimate for Lupin's net profit for the reporting quarter is INR 13 billion from Kotak Securities Ltd., while the lowest estimate is INR 10.3 billion from Motilal Oswal Financial Services Ltd. Revenue estimates range from a high of nearly INR 68 billion by Kotak Securities to a low of INR 62.8 billion from Nirmal Bang Equities Pvt. Ltd.

On a trailing basis, Lupin's net profit is projected to decline 4% due to a high base in the June quarter while revenue is seen increasing 4% due to incremental sales in the US for some key products, according to analysts. Mumbai-based Lupin will detail its Jul-Sept earnings on Nov. 6.

North America, mainly the US, accounts for nearly 40% of Lupin's consolidated sales, while India accounts for nearly 35% of sales. Europe, West Asia, and Africa--classified as the EMEA region by the company--contribute over 10% of Lupin's total sales. Asia Pacific, Latin America, and other world markets--classified as other emerging markets--contribute nearly 10%, and the active pharmaceutical ingredients business contributes the remaining 5%.

KEY GROWTH DRIVERS

Lupin has been the chart-topper among Indian peers in achieving robust growth in the US market for the last 14 quarters in a row, driven by product launches and market share gains.

The company is likely to gain primarily from its kidney treatment drug, generic Tolvaptan tablets, in the September quarter. The company launched the drug in May with 180 days of exclusive marketing rights. Market share gain by generic Spiriva, used to treat chronic obstructive pulmonary disease, is another booster for the company. The launch of the overactive bladder drug generic Myrbetriq, diabetic drug Glucagon, and heart drug generic Entresto are some of the products that are expected to boost Lupin's US sales in the September quarter, according to analysts.

Analysts' estimates for Lupin's US sales were in the range of $286 million, the lowest estimate from ICICI Securities Ltd., to $330 million, the highest estimate from Kotak Securities. The company reported sales of $220 million in the year-ago quarter.

Kotak, which is bullish on Lupin's overall performance, expects the company's US growth for the September quarter to be led by the full-quarter benefit of Tolvaptan and the launch of Glucagon in August. Lupin received six product approvals during the quarter, the highest among peers.

Analysts expect domestic sales to grow only moderately due to inventory adjustments and transmission on account of the recent cut in the goods and services tax. GST rate cuts will have a mixed impact on companies like Lupin, analysts said. The rate has been reduced to 5% from 12% on some drugs, while 36 life savings drugs were brought under the nil tax bracket. The company is yet to explain the actual impact of GST cuts, and which portfolio is impacted and which benefitted.

Loss of exclusivity in some in-licensed portfolios is also likely to impact Lupin's September quarter growth. The company lost exclusivity of some of its in-licensed products, including some in the anti-diabetic portfolio. Though Lupin has not provided product-specific impact, analysts believe the anti-diabetic segment is much affected due to this development.

Lupin has a significant market share in products for diabetic, cardiac, pulmonary, and chronic therapies, along with products in the consumer health category in India. Analysts' estimates for Lupin's September quarter domestic sales on-year growth were in the range of 7–8%.

Kotak Securities expects Lupin to report 10% on-year sales growth for the September quarter in the EMEA region, which comprises Europe, West Asia, and Africa. Apart from the US, India and EMEA, rest of the world segment is also expected to report 10% on-year growth for the reporting quarter.

MARGINS

Apart from contribution from the high-margin Tolvaptan, the low base effect and softening of raw material prices are likely to help Lupin report healthy growth in margins, analysts said. Although the company's earnings before interest, tax, depreciation, and amortisation margin is likely to get a boost from US sales growth, higher expenses on research and development are expected to drag the margin down a bit, analysts said.

Analysts' estimates for Lupin's EBITDA margin in the reporting quarter ranged from a low of 26.8% by HDFC Securities Ltd. to a high of 28.3% by Kotak Securities. The company's EBITDA margin a year ago was 24.1%. The average of estimates from 11 brokerages pegs the company's EBITDA at INR 17.6 billion.

Analysts are looking for the company's commentary on the status of complex generic product launches and its plans for launching the obesity and diabetic drug Semaglutide in India and other markets.

Of the 20 research reports on the company available with Informist, 15 have a 'buy' or equivalent rating on the stock with an average target price of INR 2,375, while five have a 'hold' rating on the stock with an average target price of INR 2,061 per share.

The stock has risen 3.5% since the announcement of its June quarter earnings on Aug. 5. At 1204 IST, the company's shares traded at INR 1,928.30 on the National Stock Exchange, down nearly 0.2% from its previous close. 

Following are the Jul-Sept earnings estimates for Lupin Ltd. from 11 brokerage firms in the descending order by the estimate of net profit:

End

US$1 = INR 88.22

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

Edited by Tanima Banerjee

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