• Revenue: INR 5,497 crores for Q2 FY25, up 11.3% year-on-year.

• EBITDA: INR 1,308 crores, an increase of 42% year-on-year, with margins of 23.8%.

• Gross Margin: 69.3% in Q2 FY25, up from 65.5% in Q2 last year.

• India Business Growth: 19% year-on-year.

• US Business Sales: $220 million, a growth of 3% year-on-year on a constant currency basis.

• R&D Expenses: INR 448 crores, 8.2% of sales in Q2 FY25.

• Net Debt: INR 274 crores as of September 30, 2024.

• Employee Benefit Expenses: INR 1,007 crores, 18.3% of sales.

• Manufacturing and Other Expenses: INR 1,667 crores, 30.3% of sales.

• Effective Tax Rate (ETR): 18.7% during H1 FY25.

• Warning! GuruFocus has detected 3 Warning Sign with BOM:500257.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lupin Ltd (BOM:500257) reported double-digit revenue growth, driven by strong commercial execution and new product launches.

• The company achieved a 510 basis points improvement in EBITDA year-over-year, with margins expected to remain in the 22% to 23% range.

• Strong performance in the US market, particularly in the respiratory portfolio, with successful launches like mirabegron 50-milligram.

• India business grew 19% year-over-year, outperforming the market with significant growth in key therapy areas such as diabetes.

• Non-US developed markets saw a 20% year-over-year growth, with strong contributions from Canada, UK, and Australia.

Negative Points

• Increased competition in the US market for products like Suprep and doxycycline impacted sales.

• Higher R&D expenses, which increased to 8.2% of sales, could pressure margins if not offset by revenue growth.

• Employee benefit expenses rose by 17% year-over-year, impacting overall profitability.

• The company faces ongoing FDA compliance challenges, with recent audits at Pune Biotech and Pithampur Unit 1 facilities.

• The tender business, while profitable, is inherently sporadic, leading to potential revenue volatility.

Q & A Highlights

Q: Can you provide visibility on future launches like injectable glucagon and dalbavancin? A: We expect approvals for glucagon and dalbavancin in the next couple of quarters, potentially in Q4 and Q1 of next year. These will enhance our injectables portfolio, which is currently small. We also anticipate risperidone and liraglutide approvals in the next fiscal year.

Q: What is your strategy for the GLP-1 space in India and emerging markets? A: We aim to be in the first wave of generics in India by 2026, leveraging our position as a leading cardiometabolic company. We are also preparing for other emerging markets through partnerships and internal development.