Lupin Posts Strong Q1 Numbers, Reiterate ‘Buy’ With Target 640
DSIJ Intelligence / 25 Jul 2012
Countries Top Pharma Company, Lupin has posted strong June quarter results yesterday. Company registered 43.8 per cent rise in the top line to Rs 2253 crore. The net profit also grew by 33per cent to Rs 285 crore. Its other income saw a multi fold jump from Rs 14 crore in June quarter of last fiscal to Rs 236 crore in the June quarter of the current fiscal.
EBITDA margins at 21.7 per cent were better than that recorded in the June quarter last fiscal at 19.2 per cent. The boast in EBITDA was mainly due to the lower raw material and employee cost. Its R&D expenditure stood at 8 per cent of the net sales which looks impressive compared to 7 per cent in the same period last fiscal. The higher R&D expenses have been yielding the benefits to the Pharma companies and the growth in the same is a good sign for Lupin. Going ahead we may see rise in the regulatory activity and product approvals.
In the formulations business Lupin registered 49 per cent growth; while in the API segment it registered 10 per cent growth. In the geographical areas, US business grew by 62 per cent to Rs 802 crore. The US growth in the constant currency terms is 40 per cent which has translated to the 49 per cent in rupee terms due to the rupee depreciation. The company has launched generic version of Lamivudine and Zidovudine injection in US. It has also resumed sales of Metformin Hydrochloride tablets after positive court ruling. Growth in the European Europe was in double digits i.e. 13.8 per cent.
The domestic business has surprised by 25 per cent growth which is faster than the industry growth rate of about 16 per cent.
After company acquired Japanese Pharma Company I’rom Pharma in the last fiscal the revenues in Japan have doubled to Rs 332 crore. Ex I’rom Pharma, the growth of Lupin in Japan has been at 37 per cent which is still better. In the rest of the world market the growth was over 50 per cent.
Overall the business growth has come higher. Lupin is also required to growth by this rate if it is to reach USD 3 billion mark in next three years.
On the regulatory front, company has filed 3 ANDAs during the quarter and now has total of 176 ANDAs with total 65 approvals. Company has many first to file drugs and is expecting to monetize them in couple of years. Besides it is also set to launch more products in US market in next two fiscal hence we are expecting the US growth to continue. Besides there will also be higher growth in Japan due to the boom in the generic market.
Overall we are bullish on the Lupin and advice to buy the scrip which looks to achieve the target of 640 in this fiscal.
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