Lupin disappoints in first quarter despite GAVIS acquisition

Lupin recently reported June 2015 quarter result. Lupin's consolidated revenue dropped by 5.7 per cent to Rs 3150 crore in Q1FY16. The company's total expenditure increased by 4.83 per cent to reach Rs 2334 crore in Q1FY16 on yearly basis. Its total expenditure increased largely due to a 22 per cent increment in other expenses, an 18.44 per cent increment in employee cost, a 11.79 per cent increment in raw materials during the quarter.

The EBITDA of Lupin decreased by 26.74 per cent to Rs 817 crore in Q1FY16 compared to same period in previous financial year. The EBITDA margin of the company contracted considerably to 25.92 per cent with contraction of 745 basis points in Q1FY16 on yearly basis. Its other income increased by 161.43 per cent to Rs 76 crore in Q1FY16 on yearly basis. Lupin's net profit decreased by 15.96 per cent to Rs 525 crore in Q1FY16 on yearly basis as tax expense of the company decreased by 34.39 per cent to Rs 264 crore during the quarter. The company's net profit margin contracted by 203 basis points to 16.67 per cent in Q1FY16 compared to same period in previous financial year.

Considering the geographic segment wise result, net sales in the US decreased by 26 per cent to Rs 1191 crore, while net sales of South Africa decreased by 6 per cent to Rs 82 crore and revenue from Japan declined by 5 per cent to Rs 323 crore in Q1FY16 on yearly basis. The revenue from rest of the world increased by 44 per cent to Rs 183 crore, revenue from Europe increased by 21 per cent to Rs 86 crore and revenue in India increased by 16 per cent to Rs 885 crore and in Q1FY16 on yearly basis.

Lupin acquired privately held GAVIS Pharmaceuticals LLC and Novel Laboratories Inc. (GAVIS) for USD 880 million. Lupin enhanced its US generic business and also broadened its pipeline in dermatology, controlled substance products and other high value and niche generics through this acquisition. GAVIS recorded USD 96 million sales in FY2014.

Lupin is a transnational pharmaceutical Company, producing a wide range of generic and branded formulations. The Company has its market share in key markets in the cardiovascular (prils and statins), diabetology, asthma, pediatrics, CNS, GI, anti-infective and NSAIDs therapy segments, Anti-TB and, cephalosporins segments.