1. Slow USFDA approvals behind muted sales growth: Kamal Sharma, Lupin

Slow USFDA approvals behind muted sales growth: Kamal Sharma, Lupin

Lupin, which posted a net profit of Rs 601.5 crore in Q3 FY15, up 26% year-on-year, is likely to complete $100-million acquisitions in the next six months.

Published: February 5, 2015 3:47 AM

Lupin, which posted a net profit of Rs 601.5 crore in Q3 FY15, up 26% year-on-year, is likely to complete $100-million acquisitions in the next six months. Kamal Sharma, the company’s vice-chairman, shares with Neha Bothra his road map. Excerpts

What are the highlights of this quarter’s earnings?
We have always been committed to sustainable and profitable growth. We have gradually increased our ebitda (earnings before interest, tax, depreciation and amortisation) over the last few years and sustained ebitda growth of 30% over the last three quarters. Profit growth has also been heartening.

What’s the reason for this quarter’s subdued sales growth?
The quarter saw muted sales growth mainly because we didn’t receive as many USFDA approvals as we expected. This was due to slow reviews by the USFDA. We had hoped to launch 25-30 drugs this year, but so far we have launched eight. We expect to launch 12 by the end of the year. The business continues to be strong, but generic launches were muted.
Second, around 12% of our revenue comes from Japan. Growth in rupee terms came down because of the depreciation in the yen. We faced a similar issue in South Africa — the rand depreciated against the dollar.
India grew steadily, even through last year’s turmoil.

What’s your growth outlook?
We are confident of doing well and expect 15-20% growth, global macro factors such as currency issues notwithstanding. Our business was affected in countries where the currency depreciated.

How much market share did you garner for Celebrex (arthritis drug) during the quarter?
About 15%.

Given you have zero debt, what kind of growth options are you evaluating?
We roughly spend Rs 500 crore on capex to expand the existing facilities and set up new units. We continue to invest in research and development. A lot of clinical work will soon begin. Depending on the protocol and schedules,  the launches would be determined.
We recently acquired a business in Mexico and are looking to buy assets and brands in America.

Which segments are on your list?
We are evaluating brands mainly in the paediatric and primary health care space. The portfolio size would be $50-100 million. We hope to announce the deal in either in Q4 FY15 or Q1 FY16.

By Neha Bothra

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