During the quarter under review, the company’s profit after tax increased by 18.9 per cent to Rs 464.2 crore from Rs 390.3 crore in the year-ago quarter. Earnings before interest, taxes, depreciation, and amortization (Ebitda) margin also improved 500 basis points (bps) YoY at 18.6 per cent from 13.8 per cent in Q4FY20. On sequential basis, EBITDA margins declined 180 bps from 20.6 per cent in Q3FY21.
On the back of a strong ramp-up of inline products and meaningful new product launches, the management is confident of a solid growth trajectory and continued margin expansion.
The numbers, however, were marginally below Street estimates. ICICI Securities, for instance, says that Lupin’s Q4FY21 operational performance was slightly below their estimates led by a weak Flu season in the US and a YoY decline in API sales.
"In addition to the ongoing exercise to control opex, it remains on track for the review process of limited competition products for developed markets", the brokerage firm said, adding that it has raised its FY22E/FY23E EPS by 2 per cent/9 per cent to factor in outperformance in the domestic formulation (DF) segment, niche launches in the US and European market, extended benefit of cost savings in DF, and lower effective tax rate.
As per the management, FY22 US sales would be largely driven by gProAir ramp-up and new launches such as Brovana. Domestic branded formulations are expected to grow in double digits in FY22, keeping analysts enthused about the company.
develops and commercializes a wide range of branded and generic formulations, biotechnology products and APIs in over 100 markets
in the US, India, South Africa and across Asia Pacific (APAC), Latin America (LATAM), Europe and MiddleEast regions. It enjoys leadership position in the cardiovascular, anti-diabetic, and respiratory segments and has significant presence in the anti-infective, gastro-intestinal (GI), central nervous system (CNS) and women’s health areas.
That said, the resolution of warning letter and clearance of official action indicated (OAIs) status on plants could be the near term lever along with progress on margins front, believes the brokerage.
"However, like other pharma majors, Lupin has also chalked out a product, cost rationalisation drive. We expect the performance to improve gradually from here on with some high profile launches and cost control measures. Together, these two factors (niche launches and cost rationalisation) are likely to overcome regulatory pains," analysts at ICICI Securities said in results update.
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