Lupin Q1 net plunges 59% to Rs 358 cr on price erosion in US

Revenue for the quarter too declined 13.4% on a year-on-year basis to Rs 3,869 crore

Price erosion of key anti diabetes drug Glumetza in the US and muted sales growth in the domestic market due to good and service tax implementation in India resulted in 59 per cent fall in Lupin's profit in first quarter of FY18.

Net profit for the quarter under review of FY18 was Rs 358 crore as against Rs 882 crore in the same period a year ago. Revenue for the quarter too declined 13.4 per cent on a year-on-year basis to Rs 3,869 crore. Along with price erosion and GST disruption, revenue was also impacted due to the strengthening of rupee and headwinds in the Japanese market.

Earlier the Lupin had indicated that FY18 will be a challenging year, the drug maker said the first quarter result was below its expectation. The revenue and profit figure also missed Bloomberg estimate by 11 and 31 per cent.

"Our focus remains on building our complex generic pipeline, operational excellence, regulatory compliance and building a differentiated speciality business," Lupin's managing director Nilesh Gupta said.

Lupin's chief executive officer Vinita Gupta said the company plans to develop speciality drug portfolio in US, Japan and Europe. After missing out on the first wave of biosimilars the company aims to develop copies of biological drugs and will begin product filing in next 3-6 months.

Lupin earns around 40 per cent of its revenue from the US market and sales from the market declined 26 per cent on a year-on-year basis. This was on account of sharp erosion in the price of diabetes drug Glumetza. The company will launch over 30 products in the year and expects to receive approvals for products in the US over next couple of months.

Lupin's chief financial officer Ramesh Swaminathan guided that company will maintain Ebidta margin between 21-23 per cent and expects domestic business to bounce back in remaining nine months of FY18.