Lupin falls after poor Q2

about 11 months ago
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Lupin is down in the red today morning, going down over 3% to Rs.862.20. Its 52-week low is in the red at Rs.723.55.

The market is unhappy with its Q2FY19 performance. Its net profit fell 41% (YoY) at Rs.268 crore mainly on the back of a flat topline and degrowth in USA business.  

Revenue from operations was at Rs.3951 crore v/s Rs.3952 crore (YoY). USA formulations business showed a degrowth of 8%.

The fund houses in fact have not yet given up and most felt that H2FY19 would be much better.

The company is optimistic and expects better performance in second half mainly on the back of price stability in USA. The company launched specialty drug, Solosec in the USA in May and holds exclusive marketing rights for 10 years and this is expected to be a winner for Lupin.

Regarding its USA FDA issue, it has completed the remediation work at its Goa and Indore plants, which are under warning letters and had asked for a meeting with USFDA to seek re-inspection. The company hopes to solve the issues in FY19.

Lupin has also made meaningful progress on cost optimisation, including rationalisation of the product portfolio in the US, cost-cutting across sales and manufacturing functions and in R&D productivity. Its expects all this to show results from next fiscal.

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