Could exceed earlier outlined guidance: Lupin

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Could exceed earlier outlined guidance: Lupin

In an interview to CNBC-TV18, Dr Kamal K Sharma, managing director, Lupin said, the company will be able to maintain its performance during the year.

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Pharma player Lupin's Q3 net profit was up 5% at Rs 235 crore versus Rs 224 crore, year-on-year, YoY. Its revenue was up 19% at Rs 1,790 crore versus Rs 1,510 crore, YoY .

In an interview to CNBC-TV18, Dr Kamal K Sharma, managing director, Lupin said, the company will be able to maintain its performance during the year. 

Lupin guided for 20-25% growth for the entire fiscal and expects to exceed this guidance. "I feel we should do slightly better than that because our nine months year-to-date (YTD) growth, topline has been 22%. Our EBITDA margins are about 21% plus."

Below is the edited transcript of Sharma's interview with CNBC-TV18. Also watch the accompanying video.

Q: Can you just break up your performance between what you saw with the Indian formulation sales and also your global performance?

A: The overall growth is 22%. The India growth has been about 29%, but that is also in a way including Eli Lilly business that we went into alliance with last quarter. It does not have the number in the corresponding quarter, so it looks about 3% more there. The America growth was about 25% in rupee terms and in dollar terms about 13%.

The brand grew 18%, the generic grew 9%. In Japan the growth has been about 5% during the quarter but in terms of rupee again it's 25%. But the profit growth has been very handsome in Japan at 21%. There is a general sluggishness in the market in Japan for some time, but I am sure it will get corrected.

The reason for that has been much increased competition for a while and some of the major innovator companies coming into the fray of generics. But I see that this situation should get evened out sooner than later. The market should go back to about 10-12% growth.

Q: You had outlined a growth of about 20-25% for the entire fiscal and margins at about 20%. Do you think you can hold on to both of those targets?

A: I think. In fact I feel we should do slightly better than that because our nine months Year-to-Date (YTD) growth, topline has been 22%. Our EBITDA margins are about 21% plus. So, I would still hope that we should do better. This year we will definitely maintain and hopefully we should do better in coming times.

Q: Do you expect to see a pick up in the US market from here on which has been a bit sluggish in the previous quarters?

A: Certainly, because this year we received about 13 approvals and you would have noticed, we were not getting approvals for almost year and a half or two.  As of now, we have 61 approvals of which 33 are in the market. Some of these products would definitely be seeing themselves in the market in the fiscal. We hope to be launching about 30 products next year and 30 products thereafter.

We have a pipeline of 95 products pending approvals more additions will also be made during this year. I certainly do believe that we would see much better growth rates in the US. With the new prescription of having a user fee for review applications, once that gets into system, we will see much more rapid approvals for the products.

Q: Just one word then - you were telling us about the sluggishness in Japan. You have made an acquisition I'rom Pharma. What do you see in terms of earnings accretion and contribution to your numbers in the quarters to come from that one?

A: I'rom Pharma today is about USD 70 million business in terms of revenue. Their net profit is not very high. But importantly, for us we have a company called Kyowa as you know which is deeply into oral solids. Japan has a very large proportion of in-hospital treatment where you need injections as a first line of treatment. We evaluate it, going organic would mean five years from now with construction and approvals. So this is a very strategic acquisition for us.

This gives us access to facility and development of injectable. I'rom has a very good, sound record of developing injectable and also licensing them to other people apart from selling them themselves. We have also acquired hospital sales force which we did not have in Kyowa. We had only about eight people. We have another 27, so altogether we will have 35 trained in hospital business people which would help us grow our business in hospitals.