Markets
Trump's tariff threat takes the sheen off Lupin’s product launches
Summary
- A big dampener to Lupin’s plans would be the potential imposition of tariff on pharma products by the Trump government. However, the management expressed hope of an exemption for the pharma sector due to the risk of a shortage.
Lupin Ltd’s recent launch of generic version of Xarelto 2.5 mg is one of the several it has planned for the US market. The estimated annual sales of the product, used as an anticoagulant agent, is about $450 million in the US. To that extent, this launch adds to Lupin’s FY26 revenues.
The company derived nearly one-third of its revenue from the US market in the nine months ended December (9MFY25). Additionally, Lupin has a strong pipeline of more than 20 respiratory products and 40 injectable products in the development stage to leverage its market presence.
It plans to file over 30 abbreviated new drug applications (ANDAs) in the next two years. Of this, more than 50% will be complex generic products–a growing category of products with complex active ingredients, formulations or routes of delivery and more difficult to develop. FY26 launches include Tolvaptan, used to treat low sodium in blood, in the first half and a portfolio of injectable products in the second half.
The company is also expanding its portfolio through inorganic route and it stated during the Q3FY25 earnings call that it is looking at late-stage assets within specialty business. It acquired a range of products from Eli Lilly in December and has entered into an agreement for three trademarks for the Indian market from Boehringer Ingelheim, a German pharma company.
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Lupin has fared well on financial performance this year with consolidated revenue for 9MFY25 up nearly 13% year-on-year and Ebitda margin of 24%, up 480 basis points. It upgraded its FY25 guidance for the US market to double-digit growth after Q3 results, from high single-digit guidance earlier.
However, a big dampener to Lupin’s plans would be the potential imposition of tariff on pharma products by the US government. The company’s management expressed hope of an exemption for the pharma sector due to the risk of a shortage.
“If it’s otherwise, we'll be looking at other ways and means of mitigating the impact with a combination of manufacturing in the US as well as wherever possible, from a cost perspective and otherwise," said the management. Lupin is also facing the risk of price erosion due to stiff competition and rupee depreciation.
Amid this, the stock has declined about 15% so far in 2025, bogged down by US tariff uncertainties. The shares trade at 24x FY26 estimated earnings, as per Bloomberg consensus. The US government’s move on the tariff is a key trigger.
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