Lupin hits 33-month low on weak Q4 results

It past two months, the stock underperformed the market by falling 24% against 3% rise in Sensex.

Shares of Lupin dipped 7.7% to Rs 1,134, its lowest level since August 2014 on BSE in early morning trade, after the company’s quarterly net profit nearly halved to Rs 380 crore in March quarter (Q4FY17) from a year ago. The pharmaceutical company had reported net profit of Rs 748 crore in a year ago quarter.

Total revenue from operations during the reporting quarter grew marginally by 1% at Rs 4,253 crore against Rs 4,197 crore in the corresponding quarter of previous fiscal. Ebitda (earnings before interest, tax, depreciation and amortization) margin declined to 19.9% from 32.8%.

“Net Impact of foreign exchange fluctuation on EBITDA was a loss of Rs 168 crore during Q4FY2017 as compared to a gain of Rs 27 crore during Q4FY2016. Also, the company made a provision for liability towards its Australian subsidiary amounting to Rs 156 crore, in respect of compensation for patent litigation towards its Isabelle generic launch in Australia. These aided the contraction in the OPM,” Angel Broking said in a client note.

“The Lupin management has indicated that the next 12-15 months will be difficult, as the US, Japan and India businesses are undergoing structural changes. Mounting pricing pressure due to consolidation of distribution channels, increasing competition in gFortamet and gGlumetza, and delay in key product approvals are likely to persist going forward. Therefore, we feel that Lupin will continue to witness pressure on its US business and margins over the next few quarters,” Sharekhan said in result update..

It past two months, the stock underperformed the market by falling 24% as compared to 3% rise in the S&P BSE Sensex.

At 09:37 am; it was down 6% to Rs 1,159 against 0.27% rise in the benchmark index. A combined 1.22 million shares changed hands on the counter on BSE and NSE so far.