Notably, the company has been witnessing strong growth in the US over the past few quarters after feeling the heat of pricing pressure in key products. The June quarter, for instance, benefited from exclusivity sales of generics of angina treatment Ranexa, which drove US sales 29 per cent year-on-year (YoY). However, after the end of Ranexa exclusivity, analysts now are watchful of other large product approvals to compensate. While thyroid treatment Levothyroxine, based on capacity ramp-up and approval for additional dosage, may perform better, analysts also feel ramp-up in branded drug Solosec, which has disappointed until now, may pick up too.
However, the anticipated delay in approval of respiratory generics, ProAir, and European approval of Etanercept, an autoimmune disorder treatment drug, is keeping concerns elevated. Analysts at HDFC Securities said that at a time when four formulation plants are under official action indicated or warning letter, these big-sized product approvals had become crucial.
has been doing well in the domestic and other emerging markets, which is a positive. The domestic formulation business (30 per cent of revenues) had grown 9.7 per cent YoY, while Rest of World sales (10 per cent of revenues) had clocked 6.8 per cent growth in the June quarter.
Lupin and analysts remain optimistic on domestic sales growing ahead of the Indian pharma market. However, with the US market (39 per cent of revenues) still not completely out of the woods, analysts remain cautious despite reasonable stock valuations.
Analysts at Antique Stock Broking had said that Lupin has one of the most visible pipelines, but it is yet to prove it can launch complex generics, and lack of approvals in key products is a case in point. Hence, despite an estimated growth of 75 per cent in earnings between 2018-19 and 2020-21, they see limited scope for rerating.