Lupin profit declines 12%, but comes better than estimates

Revenue grew 6.8% to Rs 3,357 crore largely due to growth in India and Europe business

Drug maker Lupin's net profit declined 12 per cent to Rs 529 crore in the third quarter of FY16 owing to flat US sales. In the same period last year, Lupin had reported profit of Rs 601 crore.

Revenue grew seven per cent to Rs 3,357 crore, largely due to growth in India and Europe businesses, while sales in the US market remained weak year-on-year. In the first half of the financial year, revenue was lower by 2.3 per cent.

Lupin's third quarter profit was better than market estimates. Bloomberg had estimated the company to post a net profit of Rs 510 crore and the earnings before interest, taxes, depreciation and amortisation (Ebitda) of Rs 795 crore. However, Lupin posted a higher Ebitda of Rs 945 crore for the quarter under review.

While the US business grew on a sequential basis, it remained flat year-on-year. The decline in US business is attributed to price erosion in the market and the company is looking to minimise the impact with the launch of new dosage forms of its key brands.

The US market accounts for about 40 per cent of the company’s revenue; in the third quarter, its contribution was Rs 1,404 crore. Domestic and Japan businesses grew 17 per cent and 9.2 per cent, respectively.

Nilesh Gupta, managing director of Lupin, said: “We are back on the path of growth. Sequentially, the quarter has improved significantly and this will get much better. The quarter saw a significant pick-up in approvals as well as product launches, with good growth in the US, India, and Japan.”

“We continue our investments in research as well as our manufacturing operations and this will drive long-term growth.”