Lupin Q2 profit plunges 41.5% to ₹266 crore

New Delhi: India’s second largest drugmaker Lupin Ltd, which posted a lower-than-expected second-quarter profit on Wednesday, is hopeful of better fiscal next year, owing to its cost optimisation efforts and stabilisation in the US market, its top officials said.

Lupin’s net profit plunged 41.5% to ₹ 266 crore for the quarter ended September 30, following a decline in US business and rise in the manufacturing costs, the officials added.The drugmaker had reported ₹ 456.87 crore profit in the year-ago quarter. Additionally, revenues for the quarter rose to ₹ 3,890.93 crore compared with ₹ 3,874.16 crore in the year-ago quarter.

“Despite various challenges we are pleased that each part of the region grew on quarter on quarter. There are pressures in particular to the US market but we are heartened to see that revenue levels have stabalised,” said Vinita Gupta, chief executive office of Lupin in a media conference call.

The Ebitda for the quarter fell by 35.6% y-o-y to ₹ 549.64 crore as against ₹ 853.05 crore in the corresponding quarter last year. Its Ebitda margin for the quarter stood at 13.9%. “This contraction was due to jump in cost of materials as percentage of sales to 22% in Q2 FY19 from 16% in Q2 FY18,” its officials said.

Gupta said that going forward, Lupin’s upcoming launches, emerging markets hold promise for its growth. “The business in India is a big part of the revenue. India is a growth factor. It is a big part of revenue and we will continue to grow. The emerging markets like South Africa, Mexico, Latin America, are expected to contribute. Investments made in solosec should contribute to our bottom line,” said Ramesh Swaminathan, chief financial officer (CFO), Lupin Ltd.

The company has also adopted cost cutting measures. “We do expect second half to be much better. We are trying to cut down over all costs at the manufacturing cost front,” added Swaminathan.

On Wednesay, the PAT for the quarter came in at ₹ 268.45 crore as against ₹ 456.87 crore in the corresponding quarter last year, a decline of 41% y-o-y.

“We are focused more on generics where we have expertise. Likewise, there are ongoing efforts of looking at the cost structure. We have targeted multiple areas like manufacturing costs, procurement costs,” Gupta further said.