Lupin dips on weak Q1 operating margin

The stock dipped 5% to Rs 1,607, falling 7% from intra-day high of Rs 1,730 on the BSE.

Lupin has dipped 5% to Rs 1,607, falling 7% from day’s high on the BSE, after the company reported Ebitda (earnings before interest, taxes, depreciation and amortisation) margin at 32.2% in June 2016 quarter against 32.8% in March 2016 quarter. Ebitda margin was at 29.2% in June 2015 quarter.

Analysts expected Ebitda margin at 32.7% for the quarter.

The pharmaceutical company reported 56% year-on-year (YoY) jump in consolidated net profit at Rs 883 crore for the quarter ended June 30, 2016 (Q1FY17), on back of strong revenue. The company had profit of Rs 566 crore in the same quarter year ago.

Net Sales for the quarter grew by 40% to Rs 4,314 crore, as compared to Rs 3,081 crore in Q1 FY2016, Lupin said in a press release.

“For Q1FY2017, the company posted results better than expected numbers, on profit front, mainly on back of lower taxes and higher than expected other income. The expansion in the margins came lower than expected on back of employee cost, a YoY growth of 45.2% and R&D expenses which grew by 104.8% YoY,” said Ms. Sarabjit Kour Nangra, VP Research- Pharma, Angel Broking.

The brokerage firm maintains ‘Accumulate’ rating on the stock with a price target of Rs 1,809.

At 03:11 pm, the stock was down nearly 5% at Rs 1,610, after hitting high of Rs 1,730 on the BSE in intra-day trade. The trading volumes on the counter surged more than nine-fold with a combined 7.4 million shares changed hands on the NSE and BSE so far.