Lupin slips 5%, nears 52-week low post December quarter results

The company reported lower-than-expected margins and net profit in December quarter due to one-time expenses related to residual metformin returns and provision for aged stock returns of Oseltamivir.

Shares of Lupin dipped 5 per cent to Rs 859.50 on the BSE in Friday’s intra-day trade after the drugmaker reported lower-than-expected margins and net profit in December quarter (Q3FY22) due to one-time expenses related to residual metformin returns and provision for aged stock returns of Oseltamivir.

The stock of the pharmaceutical company was trading close to its 52-week low of Rs 854 touched on December 20, 2021. In the past six months, it has slipped 25 per cent, as compared to a 8 per cent rally in the S&P BSE Sensex.

In Q3FY22, Lupin’s earnings before interest tax and depreciation and amortization (EBITDA) margins contracted by 580 bps quarter-on-quarter (QoQ) and 1,050 bps year-on-year (YoY) at 9.9 per cent. Profit before tax (PBT) more-than-halved( down 68.2 per cent YoY) at Rs 1,671 crore. The company said that excluding one-time expenses of Rs 193 crore, Q3FY22 EBIDTA margin was 14.6 per cent and PBT was Rs 360 crore.

The company’s revenues grew 3.6 per cent YoY to Rs 4,161 crore wherein domestic formulations grew 7.8 per cent YoY to Rs 1,473 crore.

The management said that the company is on the path of sustained growth across markets. Lupin’s inhalation portfolio continues to build share in the U.S. and helped register double-digit growth sequentially, despite pricing and demand challenges on seasonal products. “The inflationary environment has impacted margins, but we remain focussed on margin and EBIDTA improvement as we deliver on key product launches, cost optimization and improving efficiencies, especially by H2FY23,” it said.