Lupin: Q1FY15 Result Analysis

Drug maker Lupin posted better results on all the parameters for the quarter ended June 2014. For Q1FY15, the company posted sales of Rs 3284 crore as against Rs 3181 crore, witnessing a growth of 35.7% on YoY basis. On the operating front, EBITDA margins came in at 34.8% as against 28.5% Q1FY14, an expansion of 630 basis points on YoY basis. A huge part of the margin expansion came on back of the dip in other expenditure (which declined by 4.9% YoY) and gross margin expansion (66.3% vs 63.9% in Q1FY14). PAT came in at Rs 624.7 crore, registering a YoY growth of 55.8%.

Lupin reported 29% growth on YoY basis in its domestic business at Rs 760 crore while its US business shot up 57% to Rs 1605 crore in the quarter ended June 2014. Japanese business remained strong for the second consecutive quarter, growing 17% to Rs 341.5 crore. During the quarter, revenue from its South Africa region jumped 16% at Rs 86.9 crore and rest of world business expanded by 4% at Rs 127.1 crore compared to the year-ago period. European business declined 7% on yearly basis to Rs 69 crore. 

Lupin said its capex in the quarter was Rs 110 crore and it launched four products in the US during the quarter. Tax expenses jumped 85.5% to Rs 402.94 crore during the quarter from Rs 217.16 crore in the year-ago period.

US and Europe

• US formulation sales (including IP) grew by 57% to Rs 1605.5 crore during Q1FY15, as against Rs 1025.6 crore in Q1FY14, contributing 49% to overall sales.
• US revenues increased by 46% to USD 262 million during Q1FY15.
• The Company launched four products in the US during the quarter. Lupin now has 73 products in the market.
• Lupin is now the market leader in 31 products marketed in the US generics market. The Company is amongst the Top 3 by market share in 53 products. (IMS Health, March 2014).

Going forward buying activity in the stock cannot be ruled out.