Lupin falls 7% post Q1 results, hits over three month low

The pharmaceutical company reported a disappointing April-June quarter (Q1FY22) performance on the margins front

Shares of Lupin dipped 7 per cent to Rs 1,035.65, hitting an over three month low on the BSE in intra-day trade on Wednesday after the pharmaceutical company reported a disappointing performance for the April-June quarter (Q1FY22) on the margins front. The company's revenues, meanwhile, were driven by US$50 million licensing income and strong domestic growth. The stock was trading at its lowest level since April 19, 2021.

At 01:44 pm, Lupin was trading 6 per cent lower at Rs 1,051, as compared to a 0.14 per cent decline in the S&P BSE Sensex. The trading volumes on the counter more-than-doubled, with a combined 5.78 million equity shares having changed hands on the NSE and BSE so far.

For Q1FY22, Lupin reported an 18.1 per cent quarter-on-quarter (QoQ) growth in profit after tax (PAT) at Rs 548 crore as against Rs 464 crore in Q4FY21. The sales grew 12.7 per cent to Rs 4,237 crore on the strong growth of 27.2 QoQ by India business. The company’s North America sales were down 10.8 per cent sequentially at Rs 1,330 crore. Lupin said it received $50 million from Boehringer Ingelheim for achieving key milestones for its novel MEK inhibitor compound collaboration.

Ex-licensing income, Ebitda (earnings before interest, taxes, depreciation, and amortization) margins remained subpar at 14 per cent YoY. Decline in gross margins largely offset by lower employee cost, ICICI Securities said in a note.

"Apart from quarterly gyrations, resolution of warning letters and clearance of Official Action Indicated (OAIs) status on plants could be the near term overhang along with progress on margins front. Barring Covid19 impact, growth in India to remain consistent but remains lumpy for APAC. Like other Pharma majors, Lupin has also chalked out a product and cost rationalisation drive. We would be revisiting our estimates and coming out with a detailed update post discussion with the management," the brokerage firm said.