EBITDA (earnings before interest, tax, depreciation and amortization) margin stood at 18.4% in Q3FY18 against 23.9% in Q3FY17.
The company said the quarterly performance was muted on the back of business mix as well as forex losses.
“The company’s near-term priorities are to successfully commercialize Solosec, resolve the warning letter on Goa and Indore Unit 2 and continue to evolve our complex generic pipeline while accelerating growth in our other markets,” said Nilesh Gupta, managing director, Lupin.
According to analyst at Antique Stock Broking, in the near term, the story is unlikely to change materially as investments in specialty - barring Solosec - are unlikely to play out in the next 12-18 months. The end of gFosrenol exclusivity and Nostrum's gFosrenol launch are likely to be compensated by continued traction in gVigamox, gTobi and gAxiron launches.
“While we expect FY19 to be a recovery year, growth is likely to be back-ended as Solosec and levothyroxine launch are likely to make material contribution only in the latter half; besides material launches like gNamenda XR, gWelchol, gRenvela are also in Q419. The impacted plants are likely to be ready for inspection only by mid-2018 and thus possibility of a material surprise in the US business remains unlikely,” the brokerage firm said and maintains ‘hold’ rating on the stock.
There is no dearth of challenges, as Lupin grapples with the impact of regulatory issues in the near term as well as continuing risk of erosion in its branded and generic portfolio in the US market, analysts at Emkay Research said in result update.
In the near term, the lack of fresh approvals pending new FDA clearance of the Goa and Indore plants and further decline in the Metformin franchise would weigh on earnings recovery. Beyond FY19, while the pace of launches should recover, earnings recovery would be hobbled by genericisation risk to the branded portfolio, primarily gMethergine, it added.
At 10:19 AM; the stock recovered from early morning lows and down less than 1% at Rs 796 on BSE. On comparison, the S&P BSE Sensex was up 0.46% at 34,358. A combined 1.88 million shares changed hands on the counter on BSE and NSE so far.