Lupin - Q3FY21 First Cut - ICICI Direct

(CMP: Rs. 1050; MCap: Rs. 47630 crore)

Lupin's Q3FY21 revenues were in-line with I-direct estimates whereas profitability was above expectations due to better gross margins, cost control and a lower tax outgo.

Q3FY21 Earnings Summary

- Revenues grew 6.6% YoY to Rs. 4017 crore (I-direct estimate: Rs. 3961 crore). US revenues grew 4.8% YoY to Rs. 1442 crore (I-direct estimate: Rs. 1434 crore) whereas domestic formulations grew 5.4% YoY to Rs. 1367 crore (I-direct estimate: Rs. 1362 crore). ROW markets remained flattish at Rs. 437 crore (I-direct estimate: Rs. 412 crore). API segment grew 8.4% YoY to Rs. 344 crore (I-direct estimate: Rs. 381 crore)

- EBITDA margins improved 797 bps YoY to 19.4% (I-direct estimate: 16.5%) due to better gross margins amid ramp-up of complex generics segment and better operating leverage owing to cost control measures. EBITDA grew 81.0% YoY to Rs. 779 crore (I-direct estimate: Rs. 654 crore). Beat vis-a-vis I-direct estimates was due to better overall operational performance

- Adjusted net profit stood at Rs. 438 crore, up 258% YoY (I-direct estimate: Rs. 304 crore). Delta vis-a-vis EBITDA was due to lower interest cost and tax rate.

Resolution of warning letters and clearance of Official Action Indicated (OAIs) status on plants could be the near term overhang along with progress on the margins front. Barring Covid-19 impact, growth in India to remain consistent but remains lumpy for APAC. Like other Pharma majors, Lupin has also chalked out a product and cost rationalisation drive.

We would be revisiting our estimates and coming out with a detailed update post discussion with the management.

Shares of LUPIN LTD. was last trading in BSE at Rs.1050.25 as compared to the previous close of Rs. 1074.25. The total number of shares traded during the day was 125940 in over 5898 trades.

The stock hit an intraday high of Rs. 1077.1 and intraday low of 1038.15. The net turnover during the day was Rs. 133583794.

Source : Equity Bulls

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