Lupin Posts 4.9 % Rise In Its Net.

Lupin, one of the leading pharmaceutical companies announced its third quarter results today. On a consolidated basis the company has posted a rise of 21.9% in its topline while the bottomline grew by 4.9% to Rs 235 crore. Consequently its share rose by 1.85% to Rs 445.55 on the BSE today. On the standalone basis the company posted topline growth of 19% to Rs 1402 crore while its bottomline shrunk by 12% to Rs 214 crore as rising input costs and higher taxes mounted pressure.

Though its material cost decreased by 3.9%, personnel cost and manufacturing expenses increased by 0.6% and 1.3% respectively, which resulted into a decline of 191 basis points in its EBIDTA margins for this quarter as compared to the corresponding quarter last year. Finally a higher tax outgo impacted the net profit of the company. Standalone EPS came in at Rs 4.81 per share compared to Rs 5.53 per share reported in the same quarter of previous year.

However, on the consolidated basis, the EBITDA margins have improved by 85 basis points on y-o-y basis. Interest payment remained nearly in the same range and its debt to equity ratio now stands at 0.33 as against 0.25 in the the September quarter. The Company has suffered a foreign currency loss of about Rs 26 crore due to the rupee depreciation in the December quarter.

The sales from Active Pharma Ingredients (API) contributed about 11% while formulations contributed about 89% to total consolidated revenues. Domestic sales contributed 31% while exports contributed about 69%.

Its formulation sales in the regulated markets (EU, US and Japan) increased by 25.6% and the contribution from these territories stood at 52% of the total consolidated revenues. In the December quarter, company launched three oral contraceptive products in USA. For long, Lupin has been dominating the generics market in USA and recently its share in the prescription market in USA has also gone up by 5.1%. Beside this company has received another 7 ANDA approvals, taking its total pipeline of USFDA approvals to 61. In the European markets company has filed four MAA filings and has received 4 approvals.

Moving on Lupin's recent acquisition of Japanese Pharma company I’rom Pharma saw its sales in Japan jump by a whooping 42.9%. Going forward, the company sees higher sales in Japanese markets owing to favorable government policies.

In the domestic market company reported 29.8% growth in the net sales, which was was fueled by robust sales in Cardiovascular, Diabetes, Anti Asthma and Gynecology therapeutic segments.

Going forward, for FY12E the company has guided towards a revenue growth of about 22-25% and also sees margin expansion by 50 basis points. Lupin expects to achieve its above mentioned targets by continuing to launch high realization products in the coming quarters. However, it has not give any update on the launch of the generic version of block buster drug Lipitor, but the launch of the generic version of Tricor is expected in next financial year i.e. FY13E. 

We believe company has strong growth drivers in place and a robust pipeline of the ANDA and USFDA approvals will only increase its revenues in future. Beside the Japanese government's boost for the generics will also help Lupin to increase the revenue contribution from that part of the word. We believe in the current scenario of low industrial activity, Lupin provides a good opportunity for long term capital growth.