 "Lupin")
Indian pharmaceutical major Lupin is set to witness a strong financial earnings on a year-on-year (Y-o-Y) basis for the fourth quarter of the financial year 2023-24 (Q4FY23), showing a 14-16 per cent Y-o-Y jump in its topline, registering revenues in the range of Rs 5,068 crore and Rs 5,146 crore, according to brokerage estimates. The company recorded a revenue of Rs 4,430 in the Q4FY23.
According to brokerage firms, this growth is powered by the limited competition in the company’s key respiratory drug gSpiriva, indicated for diseases such as asthma and COPD.
On a quarter on quarter (Q-o-Q) basis, however, the company may see a sequential decline of 1-2 per cent in revenue in the January-March of FY24 due to seasonal weakness, according to analysts.
The pharma major may see a similar trend in net profits, as the profit after tax (PAT) is set to jump by 110-142 per cent Y-o-Y in the range of Rs 494 crore to Rs 570 crore, while the PAT could lag by 7-19 per cent quarter on quarter (Q-o-Q) compared to the third quarter of FY24. The company had posted a net profit of Rs 613 crore in Q3FY24 and Rs 236 crore in Q4FY23.
Here’s what brokerages expect from Lupin
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Nomura: The brokerage expects domestic growth at 9.5 per cent Y-o-Y in Q4FY24. It estimates the management to guide for a low-double-digit growth in FY25 ahead of the IPM.
The brokerage also notes that the company’s growth outperformance would be driven by the expanded field force. The company has increased its field force by 20 per cent over the past two years.
In the US, it factors in a $7 million decline in sales Q-o-Q to $205 million due to additional competition in gSuprep and some slowdown in seasonal products.
However, analysts believe these are likely to be negated by the launch of some limited competition in products like gProlensa, gBromsite, diazepam gel.
“Given q-q seasonal slowdown, we factor in some moderation in the EBITDA margin q-q. We expect the EBITDA margin to improve in FY25F and more so in FY26F on the back of new launches in the US, and sustained control on costs,” Nomura noted in a result preview report.
Kotak Institutional Equities: Those at Kotak expect Lupin to report $213 million US sales in Q4FY24, growing 4 per cent Q-o-Q. The analysts at the brokerage build in sequentially higher gSpiriva sales of $32 million in Q4FY24 as well as factor in the benefit of gProlensa launch in early 4QFY24.
However, they expect incremental competition from Strides in gSuprep to largely offset the boost from gProlensa.
Furthermore, they expect domestic sales to grow 11 per cent Y-o-Y for Lupin in Q4FY24. Overall sales are estimated to grow by 16 per cent Y-o-Y, albeit flattish growth on Q-o-Q basis.
Meanwhile, the brokerage factors in sequentially flattish gross margins with 10 basis points Ebitda margin expansion to 20.1 per cent.
ShareKhan: It expects the pharma major to clock 18 per cent YoY growth with Sales growth to be driven by complex products like Spiriva, Brovana, Xopenex from the US market and healthy traction in the domestic region.
Moreover, analysts concur that the firm will clock 20 per cent Ebitda margin due to good traction in less competitive drug gSpiriva. They further predict healthy operations and lower tax rates to drive profitability.
Nirmal Bang: Revenue is expected to grow by 17 per cent YoY, with the US market expected to report strong double-digit growth, largely led by the launch of Spriva and currency tailwinds, according to those at Nirmal Bang.
The domestic business is expected to grow by 14 per cent YoY as loss of exclusivity in diabetes and CVS therapy areas could hamper growth. Ebitda margin is expected to expand by 558 basis points YoY on account of a low base and launch of gSpiriva & gSuprep, analysts wrote in a report.
