Lupin Q1 Preview: Steady US sales, market share gains to boost profits

Indian drugmaker, Lupin, is scheduled to deliver its April-June quarterly earnings for the financial year 2024-25 (Q1FY25) on Tuesday, August 6, 2024. 

Brokerage estimates suggest that the pharma major is expected to see strong double-digit growth in the bottom line and single-digit growth in the top line year-on-year (Y-o-Y).
 

According to analyst estimates compiled by Business Standard, lupin may see its average revenue rise by 6.6 per cent year-on-year (Y-o-Y) to Rs 5,133 crore as against Rs 4,814 in the first quarter of FY24. Sequentially the topline may increase by 3.4 per cent compared to Rs 4,960 crore in Q4FY24

 

Moreover, the pharma major may register an average net profit of Rs 603 crore for the June quarter, against Rs 452 crore in Q1FY24, which translates to an increase of 33.4 per cent Y-o-Y for Q1FY25. 

On a quarterly basis, profits could surge by 7.6 per cent. The company reported a profit after tax (PAT) of Rs 562 crore in the December quarter of FY24. 

Here's what key brokerages anticipate for Lupin's Q1 FY25 results:

Kotak Institutional Equities: The brokerage expects Lupin to report US sales of $220 million in Q1FY25, up 5 per cent Q-o-Q. They project higher drug sales of Spiriva to the tune of $35 million, as well as factor in the launch of Myrbetriq (25 mg), and continued benefits from Prolensa. 

However, competition from Strides in Suprep might offset gains from Prolensa. Domestic sales are predicted to grow 10 per cent year-on-year, with overall sales increasing 8 per cent Y-o-Y. 

Gross margins are anticipated to decline by 40 basis points to 67.9 per cent, with earnings before interest, tax, depreciation and amortisation (Ebitda) expected to rise 24 per cent year-on-year to Rs 10.6 billion, reflecting a 20 basis point quarter-on-quarter increase in Ebitda margin to 20.3 per cent.

InCred Equities: Analysts at InCred forecast a slight growth in US sales to $218 million, up 4 per cent Y-o-Y, driven by Mirabegron, and expect high single-digit year-on-year growth in the Indian market. Margins are anticipated to improve by 70 basis points quarter-on-quarter due to the Mirabegron launch.

Nuvama Institutional Equities: The brokerage predicted continued improvement in Lupin's performance, with US sales of $211 million, driven by stable erosion, Spiriva market share gains, and the addition of Mirabegron. The Indian business is expected to grow 10 per cent year-on-year, with margins projected at 19.2 per cent due to better US and India performance and lower input costs.

BNP Paribas: Analysts at the brokerage anticipate US sales growth of 5 per cent quarter-on-quarter to $220 million, supported by the gMirabegron launch, while Spiriva contributions are expected to remain stable. Domestic sales are projected to show high single-digit growth. According to the brokerage, the key downside risks include lower-than-expected domestic growth and delays in Spiriva market share expansion.