An employee presses a button to open the door of a compression unit at the Lupin Ltd. pharmaceutical plant. (Photographer: Dhiraj Singh/Bloomberg)

Q1 Results: Lupin’s Profit Misses Estimates, Margins Contract

Lupin Ltd. reported a lower-than-expected profit in the quarter ended June on a drop in sales in the U.S. and Japan.

Net profit fell 44 percent year-on-year to Rs 202.7 crore, according to the drugmaker’s exchange filing. That’s lower than the Rs 347-crore consensus estimate of analysts tracked by Bloomberg.

“The first quarter of the ongoing financial year has been subdued, primarily on account of the U.S. and Japan,” Nilesh Gupta, managing director of Lupin, said in a statement.

Sales in North America, Lupin’s largest market, fell 26 percent, according to a separate press release.

A rise in tax rate to 47 percent from 21 percent in the corresponding quarter also hit earnings, Lupin said.

Revenue fell 0.4 percent to Rs 3,856 crore, also lower than the Rs 4,092-crore estimate. Other income, however, rose to Rs 184 crore from Rs 32 crore. Earnings before interest, tax, depreciation and amortisation fell 32 percent to Rs 527 crore. Operating margins fell to 13.7 percent from 19.8 percent, impacted by higher raw material costs.

Also read: Q1 Results: Cipla’s Profit Rises 10%, Margins Remain Flat

Geographical Performance

  • Revenue from North America fell 26 percent year-on-year.
  • Revenue from India rose 31 percent.
  • Revenue from Asia-Pacific rose 1.5 percent.
  • Revenue from Europe, Middle East and Africa rose 22 percent.
  • Revenue from Latin America fell 1 percent.
  • Revenue from the rest of the world fell 30 percent.

Segmental Performance

  • Revenue from the formulations segment fell 3.1 percent year-on-year.
  • Revenue from active pharmaceutical ingredients segment rose 32 percent.

Lupin’s shares fell as much as 5.6 percent before closing 4.7 percent lower at Rs 825.5 apiece. The stock has risen 0.5 percent so far this year compared to a 2.41 percent fall in the NSE Nifty Pharma Index.