Lupin tumbles after brokerage maintains sell rating

Lupin declined 4.45% to Rs 737.8 after the pharmaceutical company reported a net loss of Rs 127 crore in Q2 September 2019 due to one-time impact.

Lupin declared its Q2 September 2019 result during market hours yesterday. The stock rose 2.29% to end at 772.15 yesterday.

Post result announcement, multiple brokerage houses have revised their target on the stock. A foreign brokerage reportedly maintained sell rating on the company with a revised target of Rs 650. The brokerage reportedly cited that the Solosec ramp-up remains weak and the US generic launch pipeline remains thin. The Rs 540 crore provision has resulted in a cut of FY20 EPS by 36%.

 

On consolidated basis, the company reported a net loss of Rs 127 crore in Q2 September 2019 as against a net profit of Rs 265.98 crore in Q2 September 2018. The company's revenue from operations rose 10.34% to Rs 4359.65 crore on YoY basis.

Lupin reported a one-time loss of Rs 546 crore due to adjustments made during the quarter, including provisions worth Rs 379.18 crore toward a Texas lawsuit and a loss of Rs 167.30 crore toward selling stake in a Japanese joint venture, Kyowa CritiCare Co.

Lupin's India formulation sales for Q2 September 2019 stood at Rs 1341.9 crore, up 2.6% as compared to sales of Rs 1307.7 crore during Q1 September 2018.

Revenue expenditure on R&D during Q2 FY2020 amounted to Rs 435.60 crore (10.1% of sales) as against Rs 378.50 crore (8.7% of sales) during Q1 FY2020 and Rs 375.80 (9.7% of sales) for Q2 FY2019.

Meanwhile, the S&P BSE Sensex was trading 0.15% higher at 40,531.92.

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