Home / Companies / Lupin, Torrent beat market expectations

Mumbai: Drug makers Lupin Ltd and Torrent Pharmaceuticals Ltd beat market expectations in terms of growth in revenue and profit in the April-June quarter.

Lupin, India’s fourth-largest drug maker by sales, posted a 33% growth in net profit to 280.4 crore during the quarter from 210.1 crore in the year-ago period. Revenue grew 44% to 2,219 crore from 1,543 crore, the company said on Tuesday.

Rival Torrent Pharmaceuticals, which announced its June quarter results on Monday, said year-on-year (y-o-y) net profit and sales grew 7% and 19%, respectively, despite a dismal performance in the last five consecutive quarters.

Lupin’s significant growth in revenue was mainly contributed by strong sales in generic drug markets in the US, Japan and South Africa. Domestic sales, which contribute about 28% of total revenue, were also up by around 25% this quarter.

A rise in the firm’s so-called other income of 23 crore also helped boost net profit.

“Strong operating performance aided by product launches and exceptionally strong growth across the US, India, Japan and South Africa have helped us deliver yet another quarter of sustained growth," said Lupin’s managing director Kamal Sharma.

Ahmedabad-based Torrent Pharma’s revenue for the April-June quarter stood at 767 crore, up 19% from 642 crore in the year ago. Net profit grew 7% to 140 crore from 131 crore.

The company’s domestic formulations business recorded revenue of 279 crore, growing 14%, and international revenues grew 33% to 422 crore. Operations in Brazil registered revenue growth of 26%, while sales in the US grew 78%.

Domestic brokerage firm Angel Broking Ltd had stated in an early July report that the country’s pharma sector continued its market outperformance during the first quarter of 2013, and BSE Ltd’s Healthcare Index rose by 3.9% against the benchmark Sensex’s flat performance during that period.

“The pharmaceutical sector’s outperformance was despite the slowdown in economic growth and hardening of interest rates and we expect our coverage universe to register 19.8% y-o-y sales growth," the report stated. However, on account of higher tax outgo, net profit growth was expected to come in at 13.7% y-o-y, the report added.

The brokerage had predicted that large drug makers such as Sun Pharmaceutical Industries Ltd and Cipla Ltd were expected to post growth in sales at 22.3% and 12%, respectively. It estimated sales growth for Dr. Reddy’s Laboratories Ltd, Lupin and Cadila Healthcare Ltd at 26.4%, 19.4% and 15.2%, respectively. It had also said that Lupin's net profit is expected to increase 22.2% y-o-y in the quarter.

“The key positive for Torrent Pharma was the 13.5% revenue growth in the domestic formulations segment, which delivered a comfortable double-digit growth after five consecutive quarters of dismal performance," said a report by brokerage firm Avendus Securities on Tuesday.

Lupin rose 2.08% to close at 582.15 per share on Tuesday on BSE, while the benchmark Sensex gained 0.24% to close at 16,918.08 points. Torrent Pharmaceuticals gained 5.04% to close at 662.85 per share.

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