Strong revenue growth and improvement in margins led to a healthy 20.7 per cent year-on-year increase in Lupin's net profit in the latest December quarter. Lupin, the fifth largest generics player in the world, witnessed a 31.5 per cent jump in consolidated sales during the quarter, driven by its US sales. Operating margins improved to 30 per cent from 27 per cent during the same quarter last year, led by lower manufacturing and other expenses.

The company’s sales in North America grew by 57.6 per cent year-on-year to Rs 2,175.5 crore during the December quarter. In dollar terms, US sales grew by 53.4 per cent to $316 million during the quarter.

The US market accounts for about half the company’s total revenues. The company is clocking strong growth in the market thanks to the consolidation of its Gavis acquisition and also due to the growing opportunity in the generic space.

Unlike some of its peers, Lupin is also better placed on the regulatory front. Early 2016, observations by the FDA regarding the company’s Mandideep and Goa facilities impacted the stock. But subsequently in May and November, these concerns were removed with the regulator issuing establishment inspection reports (EIRs) indicating that the issues had been resolved. This has been a key positive for the company as it should accelerate product approvals.

The company launched four products in the US market during the December quarter. It has received 11 approvals from the US FDA. The company now has 128 products in the US generics market. The company has one of the strongest pipelines in the US among Indian pharma companies. The company is also focusing on building a pipeline in niche products with limited competition and high barriers such as inhalation, biosimilars and complex injectables.

Lupin is also doing well in India, which contributes nearly a quarter of the company’s revenues. The company is among the fastest growing pharma majors in domestic formulations. Despite about a quarter of the domestic portfolio being under the NLEM (National List of Essential Medicines) and, thus, subject to price controls, the growth momentum in the market has been supported with launches, coupled with additions to the sales force.

Domestic formulation sales grew by 11.9 per cent year on year.

Lupin is also growing its presence in Japan, the second largest global pharma market, where increasing patent expiries should aid generic players. The company also has a good presence in Europe and South Africa. Sales from the Asia-Pacific, Europe, West Asia and Latin America increased by 20.9, 16.8 and 32.8 per cent respectively during the December quarter.

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