Lupin pharmaceutical companies

Lupin Ltd (updated - 29 Jan 2012)
For a fairly consistent performer in terms of top line growth in the pharma industry, drug maker Lupin’s show in the quarter to December was modest. But what was disappointing was the 5% growth in net profit pulled down by high depreciation and tax.

For the company whose operating profit grew by 25% with operating margin expanding by 60 bps to 20.8%, the rupee’s slide hurt it badly. Lupin was weighed down by a forex loss of Rs 58 crore during the quarter.

In its major markets -- the US, Europe, Japan, India and South Africa -- Lupin has been growing. The closely watched US branded business posted a strong growth of 32% -- buoyed by the performance of Suprax and Antara. Its generics business in the US - where it is the fifth largest generics player --grew by a modest 18%.

The 30% growth in the domestic business was partly aided by the distribution of Eli Lily’s insulin in India by Lupin. A pick-up in the sales of anti-infective therapies also boosted these numbers. The management expects the domestic business to grow at a more sustainable rate of 20% in the coming quarters. Lupin earned over 13% of its consolidated revenues from Japan where its revenues have grown by 43% y-o-y. The company’s latest acquisition in the country during the December quarter boosted revenues and the business from Japan is expected to contribute close to 15% to the total business.

Over the next few quarters, investors may have to brace for depreciation remaining high which could adversely impact the company’s bottom line. This comes at a time when the company is aiming for higher realisations from its new product launches in the US. Lupin has potential to expand its operating margins in the coming quarters as the company shifts the manufacturing of some more bulk drugs to India and carries out some operational changes.
Source - Economic Times

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