Lupin Ltd’s stock fell 6% on Friday after the company reported a 64.72% Y-o-Y slump in its consolidated net profit to ₹106.9 crores for the quarter ended June. In the year-ago period, net profit stood at ₹303.05 crores.

Lupin is one of the largest generic pharmaceutical companies by revenue globally. The company’s key focus areas include paediatrics, cardiovascular, anti-infectives, diabetology, asthma and anti-tuberculosis.

Lupin’s businesses include the entire pharmaceutical value chain, ranging from branded and generic formulations, API ((Active Pharmaceutical Ingredient), advanced drug delivery systems to biotechnology. The company’s drugs reach 70 countries such as the USA, Europe, Japan, Australia as well as emerging markets including India, the Philippines and South Africa.

Q1FY21 (in ₹crores)Q1FY20 (in ₹crores)Change
Net Profit106.9303.05-64.72%
Revenue3,527.93,877.7-9%
Year-on-Year Comparison

Investment in R&D amounted to ₹357.50 crores, about 10.3% of sales for Q1FY21 compared with ₹344.20 in the year-ago quarter.

Nilesh Gupta, managing director, Lupin, said, “The quarter’s performance was impacted by the COVID-19 pandemic and related lockdowns, affecting our key businesses in India and US. We continue to focus on business continuity while ensuring employee safety. Despite the challenges impacting revenues, we improved margins driven by tight expense control. We expect to continue the momentum on margin improvement.”

In fact, Lupin saw a sharp decline in sales in its US business; it fell about 21% y-o-y. As this business contributes about 35% of overall sales, any decline here has a sizeable impact on its overall portfolio.

Revenue Segregagtion

The company’s India formulation sales for this quarter were at Rs 1,285.4 crores as against Rs 1,307.7 crores last year, accounting for 37 per cent of its global sales, the company said.

Pharma stocks have been rallying since the COVID-19 pandemic. You can read more about the rally of Pharma stocks here.

Globally, too, Lupin was not able to capitalize on the opportunities unlike some of its peers. The Revenue growth in other global markets also took a hit. The only segment that turned out decent results was the active pharma ingredient segment, which grew 17 per cent.

While Lupin has filed for about four abbreviated new drug applications in the US, the pipeline of drug launches is impressive. 

In conclusion, the company is optimistic about its revival in business. It will mainly depend on new launches in the coming quarter and whether it can sustain some of the cost cuts.

You can view Lupin’s financial results here.

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