Lupin revenues in line, margins impactedLUPIN - 685 Change: -11.30 (-1.62 %)
News: Revenues grew 3.6% YoY to Rs.4160.9 crore (I-direct estimate: Rs.4214.6 crore) wherein Domestic formulations grew 7.8% YoY to Rs.1473.3 crore (I-direct estimate: Rs.1503.6 crore). US revenues grew 9.4% YoY to Rs.1577.5 crore (I-direct estimate: Rs.1470 crore) while South Africa business grew by mere 1.1% YoY to Rs. 154.7 crore (I-direct estimate: Rs.172.3 crore) and RoW markets grew remained steady YoY at Rs.438.1 crore (I-direct estimate: Rs.480.7 crore). Amid higher base, API de-grew 25.4% YoY to Rs.256.4 crore (I-direct estimate: Rs.309.4 crore). EBITDA margins was down 1047 bps YoY at ~8.9% (ex-onetime expense EBITDA margins ~ 13.6%) against I-direct estimate of 16%. EBITDA de-grew 52.4% YoY to Rs.370.7 crore (I-direct estimate: Rs.672.6 crore) due to one-time costs of Rs.193.2 crores, related to residual metformin returns and provision for aged stock returns of Oseltamivir. Adjusted PAT grew by 25.2% YoY to Rs.548.6 crore (I-direct estimate: Rs.318.9 crore). Delta vis-à-vis EBITDA was mainly due to credit in tax line on count of one-time items in last quarter creating an negative impact on the overall profitability for 9MFY22.
Views: Lupin’s performance was skewed, while revenues were in-line, both margins and profitability were a miss due to one time expenses related to residual metformin returns and provision for aged stock returns of Oseltamivir.Lupin’s inhalation portfolio continues to build market share in US and registered good growth despite pricing and demand challenges on seasonal products while India also posted steady numbers. Resolution of warning letters and clearance of Official Action Indicated (OAIs) status on plants could be the near term overhang along with progress on the margins front.