Lupin Q2 Preview: Adjusted profit may decline sharply on subdued revenue, operating performance
Guidance for launches and traction in the US in the second half of FY21 and update on albuterol market share after its launch in the American market would be key things to watch out for.
Nov 4, 2020 / 12:09 PM IST
Pharma major Lupin on November 4 is expected to report a sharp year-on-year decline in the September quarter adjusted profit. The company posted a loss of Rs 127 crore due to one-time provisioning for US lawsuit settlement and loss in injectables business divestment in Japan, but profit before above exceptional items stood at Rs 258.2 crore in Q2FY20.
Revenue from operations is likely to decline around 3 percent YoY due to a high base in teh year-ago period and muted domestic business but sequentially may grow in high single-digit backed by US business after the launch of albuterol inhaler.
The operating profit could also decline in the September quarter as Q2FY20 was bolstered by NCE licensing income.
"We expect US business to recover to $175 million led by launch of albuterol inhaler. We expect domestic business to grow by 2 percent YoY, European Union to grow by 1 percent YoY, and the rest of the world (ex-SA and LatAm) to decline 10 percent YoY. We expect SA and Latin America to decline 15 percent YoY each given adverse currency movements," said Kotak Institutional Equites. It sees a 12 percent decline in adjusted profit and a 2.9 percent in revenue for the quarter YoY.
The brokerage expects core EBITDA margin to expand 135 bps QoQ to 15.2 percent and expect EPS to increase by 2X QoQ but will decline 12 percent YoY on a high base given licensing income in Q2FY20.
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Motilal Oswal also expects US sales to grow 11 percent QoQ to $175 million for Q2FY21 and domestic formulation business may be muted (2 percent YoY) for the September quarter. According to the brokerage, adjusted profit may decline 41 percent and revenue may fall 3.2 percent YoY.
Guidance for launches/traction in the US in the second half of FY21 and update on albuterol market share after launch in the US market would be key things to watch out for.