Lupin share price gains up to 1.7% as strong US sales drive net profit growth of 277%

Lupin Ltd's share price gained up to 1.7% on the NSE in the opening trade on Thursday as the company reported a strong profit growth of 277% for the quarter ending September, driven by the strong sales growth recorded in the US market.

The launch of limited competition opportunities like generic Spiriva (respiratory treatment drug), generic of Prezista (antiretroviral drug) and generic Suprep (Bowel kit) under exclusivity likely helped drive growth in the company’s US sales.

North America sales for Q2FY24 at ₹1,866.6 crore were up 17.4% sequentially and 40.4% year-on-year as compared to ₹1,329.5 crore in Q2FY23, and accounted for 38% of Lupin’s global sales.

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There was, however, some disappointment with growth in domestic market sales that accounted for 34% of Lupin’s global sales for Q2 FY2024 at ₹1,691.5 crore though they grew 3.2% sequentially and were up 6.8% as compared to ₹1,584.1 crore in Q2 FY2023. Analysts had been anticipating higher growth. 

While analysts at Motilal Oswal Financial Services Ltd (MOFSL) had expected the domestic formulation segment to grow 9% YoY for the quarter, those at Kotak Institutional Equities had expected domestic sales to grow 12% YoY for Lupin.

The weaker than expected domestic sales growth, however, was compensated by strong North American market growth and Lupin reporting a very strong performance with net profit beating analysts' estimates.

Lupin reported a net profit of ₹490 crore in the second quarter, which was 277% higher as compared to ₹130 crore clocked in the year-ago period. The net profit came in better than expectations. 

Analysts at PhilipCapital Institutional Equity Research, Motilal Oswal Financial Services Ltd and Kotak Institutional Equities Ltd had expected Lupin's net profits at ₹384.4 crore, ₹332.4 crore  and ₹374.2 crore, respectively, as per their preview reports.

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Sequentially, the net profit grew by 8% from ₹452 crore posted in the quarter ended June 2023.

The company's total revenue from operations came in at ₹5,039 crore in the second quarter, higher by 21% as against ₹4,146 crore recorded in the same period of the preceding fiscal.

Lupin's earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at ₹958.2 crore in Q2FY24, double as compared to ₹468 crore in the year-ago period. Sequentially, it was higher by 8% as against ₹879.1 crore in Q1FY23.