Lupin Q2 Preview: Profits may rise 42% YoY led by steady India, US sales

Indian pharmaceutical giant Lupin is scheduled to post its financial results for the second quarter (July-September) of fiscal year 2024-25 (Q2FY25) on Thursday, November 7. 

 

Brokerages expect Lupin to report a strong quarter on a year-on-year basis, while a quieter one sequentially. The company will likely record healthy sales across key markets buoyed by lower price erosion and key launches. 

 

According to brokerages tracked by Business Standard, Lupin is expected to report an average net profit Rs 693 crore in Q2FY25, a rise of 41.7 per cent year-on-year (Y-o-Y) against Rs 489 crore in Q2FY24. Meanwhile profits may decrease by 13.4 per cent quarter-on -quarter, compared with a profit after tax (PAT) of Rs 801 in the June quarter of FY25. 

 

Lupin’s average revenue will potentially increase 9.2 per cent Y-o-Y to Rs 5,502 crore as against Rs 5,038 crore in Q2FY24. On a quarterly basis, the revenues may decline by 1.7 per cent. The pharma company registered revenues of Rs 5,600 crore in the June quarter of FY25. 

 

Moreover, here’s what key brokerages expect from Lupin Q2 results:

 

Kotak Institutional Equities: KIE analysts expect Lupin to report $229 million in US sales for 2QFY25, a 1 per cent quarter-on-quarter increase. They project gSpiriva sales of US$37 million and contributions from the launch of gMyrbetriq 50 mg, partially offset by a slight decline in 25 mg sales. Domestic sales are anticipated to grow by 11 per cent year-on-year, with EMEA and ROW markets expected to grow by 5 per cent and 4 per cent, respectively. Overall sales are forecasted to rise 10 per cent year-on-year, remaining flat quarter-on-quarter. 

 

Analysts anticipate a 20 basis point decline in gross margin to 68.6 per cent and a 25 per cent year-on-year increase in Ebitda to Rs 1,150 crore, although down 7 per cent quarter-on-quarter. Due to elevated R&D spending at 7.5 per cent of sales, the Ebitda margin is expected to decline by 120 basis points quarter-on-quarter to 21.0 per cent.

 

HDFC Securities: HDFC Securities anticipates that Lupin's US business will see steady traction from key products such as gSpiriva, gNascobal, gProlensa, and incremental sales from the newly launched gMyrbetriq 50 mg. This growth will partially offset competition in Albuterol and gSuprep. The India business is expected to grow by 11 per cent year-on-year, with gross margins remaining strong, leading to an expansion in Ebitda margins by 200 basis points year-on-year.

 

Nuvama Institutional Equities: Nuvama analysts project Lupin's revenue to grow by 7.5 per cent year-on-year, estimating US revenue at $220 million, supported by lower price erosion, a full quarter of Myrbetriq, and the launch of the 50 mg strength during Q2FY25. They anticipate the domestic business to grow by 10 per cent year-on-year, while the EMEA and ROW markets are expected to grow by 19 per cent and 15 per cent year-on-year, respectively. Ebitda margins are forecasted at 21 per cent, driven by reduced price erosion and an improved product mix. PAT is expected to increase by 31 per cent year-on-year for the quarter.

 

PhillipCapital: PhillipCapital estimates a sales growth of 10 per cent for Lupin, primarily driven by increased sales from gSpiriva (projected at $32 million in Q2FY25 compared to US$30 million in Q1FY25) and the at-risk launch of Mirabegron (projected at $20 million). Margins are expected to improve by 450 basis points, supported by Spiriva and Mirabegron, leading to a 37 per cent jump in Ebitda from a low base. With robust US sales and a recovery in operating performance, Lupin is projected to witness a 57 per cent growth in profits.

 

Axis Securities: Axis Securities anticipates a 10.1 per cent year-on-year revenue growth for Lupin in Q2FY25E, driven by a recovery in the domestic business and new launches in the US market. They project US sales of $227 million, supported by contributions from Spiriva ($38 million), gSuprep, and gPrezista, alongside greater pricing stability. The launch of three new molecules, including gProlensa and gChantix, could add approximately $13 million in incremental sales.  Additionally, gMirabegron, launched last quarter, is expected to generate around $60 million in full-year sales. Ebitda margins could improve by 340 basis points year-on-year due to lower raw material prices and the introduction of niche products. Lupin is also expected to report a 43 per cent year-on-year growth in PAT for the last quarter.