Lupin September quarter profit falls 31% on sluggish US business
Mumbai: Drug maker Lupin Ltd on Monday said profit in the quarter ended September fell 31.3% from a year ago because of persisting price erosion in the US, its biggest market.
The profit was, however, better than market expectations because of cost rationalization measures taken by the firm. Lupin’s net profit fell to Rs455 crore in the September quarter from Rs662.2 crore a year ago. Sales declined 8% during the period to Rs3,874.2 crore.
A Bloomberg poll of 23 analysts had estimated Lupin’s consolidated net profit at Rs443.50 crore and sales at Rs4,055.50 crore for the quarter.
Compared to the June quarter, Lupin’s profit and sales rose 27.1% and 1.8%, respectively. Shares jumped 9% after the release of its earnings report but shed some gains to close 2.4% higher at Rs1,025 on BSE, while the benchmark Sensex closed 0.33% higher at 33,266.16 points.
“In Q2, we have recorded strong growth in all our markets but for the US generic business, where we continue to see pricing pressure, as expected. The Ebidta growth was further fuelled by our optimization efforts around operations and R&D (research and development) investment,” Nilesh Gupta, managing director of Lupin said in a press release.
The firm’s total expenditure decreased to Rs3,419.0 crore during the quarter from Rs3,499.9 crore a year ago, on the back of decline in input costs, and manufacturing and other expenses.
R&D investment in the quarter was Rs473.9 crore, compared with Rs571.6 crore a year ago. R&D spending as percentage of sales was at 12.2%.
Sales in the US fell to $204 million from $292 million a year ago. Total North America sales were down 31.9% at Rs1,361.1 crore during the quarter.
Lupin’s sales in domestic market grew 16.4% on year to Rs1,159.3 crore, while sales in Asia Pacific were up 15.2% at Rs635.7 crore.