Lupin stock soars to 52-week high on strong all-round Q1 show

Lupin delivered its Q1 results on August 6.

Shares of drugmaker Lupin surged over 6 percent in opening trade to hit a 52-week high of Rs 2,029.95 on August 7, a day after the company reported strong all-round performance in the April-June quarter.

At 09.20 am, shares of Lupin were trading at Rs 1,976.05 on the NSE.

The drugmaker posted an over 77 percent on year spike in its net profit to Rs 801.3 crore for the first quarter of the fiscal year 2025. It had recorded a net profit of Rs 452.3 crore in the year ago period.

Revenue also grew over 16 percent on year to Rs 5,514.30 crore in Q1 of FY25, up from Rs 4,895.10 crore in the base period. The topline growth was driven by strong double-digit sales growth in the India formulations and the US business. Brokerage firm Nomura believes the growth in US sales was supported by launch of bladder drug Myrbetriq which negated lower contribution from bowel medication Suprep.

Alongside strong topline and bottomline growth, the company's operational performance also improved significantly in Q1. Its EBITDA margin swelled up 527 basis points on year to a multi-quarter high of 23.3 percent.

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“We have had a strong quarter on the back of the momentum we built through FY24, with performance driven by new products, key geographies,
and improvement in our operating margin and profitability. We are on track for strong, sustainable growth and margin improvement backed by growth in sales, commercial and operating efficiencies, and a strong compliance
story,” said Nilesh Gupta, Managing Director, Lupin.

The company also provided Rs 75 crore towards settlement for diabetes drug Glumetza during the quarter, excluding which, its EBITDA margin came at 24.7 percent, as calculated by Nomura. The brokerage also feels that Lupin's EBITDA margin were also aided by a lower research and development, which was down 5 percent on year to come at 6.3 percent of total sales in the quarter gone by.

Adding another milestone to its list of developments in Q1, the drugmaker turned net cash positive in the quarter. The company now has net cash of Rs 19.50 crore as against a net debt of Rs 48o crore in Q4 FY24, and Rs 1,300 crore as at end of the year ago period.

Nomura also feels the upcycles across Lupin's businesses will drive its EBITDA margin expansion and earnings growth. The firm also sees a huge opportunity arising from the hyponatremia drug Tolvaptan generic, which can present upside to its current estimates.

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