Lupin's profit dips 31 per cent on weak US sales

Continued pricing pressure and increase in competition in the US market led to 31 per cent year-on-year decline in consolidated net profit of drug maker Lupin in second quarter FY 2018.

Net profit for the quarter was Rs 455 crore as against Rs 662 crore in same period last year. Revenue fell 7.9 per cent to Rs 3,952 crore on a year-on-year basis with weak US business contributing to the decline. Earnings before interest tax depreciation and amortisation(Ebitda) was 12.3 per cent lower at Rs 927 crore.

Lupin's net profit and Ebidta were 2.5 per cent and 6.5 higher than Bloomberg estimate but they were below on sales.

“In Q2 we have recorded strong growth in all our markets but for the US generic business, where we continue to see pricing pressure as expected, the Ebidta growth was further fueled by our optimisation efforts around operations and R&D investment. We are on track with our complex generic pipeline and have made significant progress on the speciality product with the acquisition of Symbiomix in the US,” said Nilesh Gupta, managing director, Lupin in a statement.

Lupin earns around half of its revenue from US market. Its key products including anti-diabetes drugs – Glumetza and Fortamet have seen a price erosion due to competition. As such the company's US business reported a drop both on a sequential and a year on year basis.