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Lupin Q1 profit drops 59.4% on subdued US business

LiveMint logoLiveMint 02-08-2017 Isha Trivedi

Mumbai: Drugmaker Lupin Ltd Wednesday reported a 59.4% fall in consolidated net profit in the June quarter, missing analysts’ estimates by a wide margin, thanks to price erosion in US, de-stocking ahead of goods and service tax (GST) and a stronger rupee.

The company reported a consolidated net profit of Rs358.06 crore, compared with Rs881.95 crore a year ago, while sales fell 12.3% to Rs3,806.83 crore. A Bloomberg poll of 17 brokerages had estimated a net profit of Rs521.5 crore and sales of Rs4,278 crore.

Besides, last year’s June quarter revenues were also buoyed by a six-month marketing exclusivity in the US for its generic version of diabetes drug Glumetza.

“Our Q1 results have been below our own expectations on count of higher than anticipated price erosion in select products like Glumetza, disruption on count of GST (goods and services tax) implementation in India and appreciation in the rupee,” Nilesh Gupta, managing director of the company, said in a press release.

Sales in North America, which accounts for 42% of total revenue, declined 26.8% on year to Rs1,601.8 crore. The company launched four products in the US during the quarter.

Domestic market sales were down 1.8% at Rs932.4 crore, while sales in the Asia-Pacific region, which includes Japan, rose 10.6% to Rs598.9 crore.

“Our focus remains on building our complex generic pipeline, operational excellence, regulatory compliance and building a differentiated specialty business,” Gupta said.

Lupin’s spending on research and development (R&D) was Rs499.9 crore in the June quarter, accounting for 13.1% of sales. Last year, the company had spent Rs670.9 crore on R&D.

Shares of Lupin closed up 1.6% at Rs1,034.25 on the BSE, while benchmark Sensex index closed 0.3% lower at 32,476.74 points.

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