Lupin's net profit fell 59.4 percent in the June quarter due to steep price erosion of generic Glumetza in the US, destocking ahead of GST and a stronger rupee.
The company reported a net profit of Rs 358.06 crore compared with Rs 881.95 crore a year ago, while sales fell 12.3 percent to Rs 3,806.83 crore.
Broking House: Motilal Oswal | Rating: Buy | Target Rs 1125
In the quarter ended June 2017 the company's revenue declined 13 percent which is primarily due to weak US business on the back of lower Glumetza sales.
The large part of the decline in US sales was because of lower Glumetza sales. In FY18 the company is expecting approval for Tamiflu, Lanthanum,
Levothyroxine, Hydrocodone APAP (2Q), Potassium Chloride (2Q) and Oxycodone APAP.
Some bigger approvals like Toprol EL, Renexa and Renvela are expected in FY19.
On the domestic front the firm expect recovery in coming quarters. Its India business has performed relatively better than peers. The company is expected to outperform industry growth by 20-30 percent.
Broking House: CLSA | Rating: Outperform | Target Rs 1100
The company guided for many small launches in 2HFY18 but no blockbuster launch. It guided for US sales to decline double digit in FY18 and EBITDA margins at 21-23 percent (24-26 percent earlier).
The company expects to file biosimilar Enbrel in the EU and Japan in FY18 and US in FY19. Within respiratory, ProAir would be the first major launch while
Advair generic development is going slower than expected. Complex injectable filings are going slower than expected.
The sharp decline in US along with currency/GST-related pressure drive steep earnings cuts of 13-35 percent. This also reverses the recent valuation correction, and performance in the US will be the key to recovery from here.
Broking House: CITI| Rating: Buy | Target Rs 1170
The company expects single-digit price erosion in the US in FY18 and double-digit decline in revenues, mostly led by gGlumetza.
The firm has cut FY18/19/20E EPS by 18 percent/10 percent/10 percent on the back of lower US sales and margins as well as a stronger INR.
At 11:56 hrs Lupin was quoting at Rs 977.35, down Rs 17.55, or 1.76 percent on the BSE.
It has touched a 52-week low of Rs 964.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
