- 04 Aug 2022
- ICICIdirect Research
US overhang continues in Q1 for LupinLUPIN - 649 Change: -10.30 (-1.56 %)
News: Revenues declined 12% YoY to Rs 3744 crore wherein Domestic formulations de-grew 9% YoY to Rs 1492 crore. US revenues declined 24% YoY to Rs 1010 crore while South Africa business declined 2% YoY to Rs 140 crore. RoW markets expanded by 32% YoY to Rs 513 crore and APIs grew 4% YoY to Rs 255 crore. EBITDA margins was down 1639 bps YoY at ~6.2% against I-direct estimate of 11.5%. EBITDA de-grew 76% YoY to Rs 232 crore. Lupin posted loss of Rs 89 crore v/s profit of Rs 542 crore in Q1FY22. Delta vis-à-vis EBITDA was mainly due to higher interest and lower other income in this quarter.
View: Lupin’s Q1 was a miss on all fronts. Revenues came in below expectations as US, South Africa and India posted lower than expected sales being only partly offset by RoW and APIs offtake. Margins and profitability were a significant miss amid adverse operating leverage. Lupin continues to remain on a weak footing in US which largely reflects in single digit margin profile for consecutive quarters. In Q1, management pared down inventories and undertook shelf stock adjustments in US while the base business remains impacted by price erosion. Lupin is focused on optimizing operating expenses and ensuring the evolution of complex generic platforms along with global portfolio maximization while doubling down on markets like India. We believe, new launches post clearance of Goa and Somerset facility along with regulatory clearance for other plants could be the near term trigger along with progress on the margins front.