The share price of Lupin fell by 7.31% on Thursday, after the company posted a lower than expected March quarter earnings. The net profit for the quarter ended March 2017 was much less than the Bloomberg Consensus estimate. Lupin has posted a net profit of Rs380 crore as against the Bloomberg Consensus estimate of Rs643 crore.
The net profit of the company for the March quarter was 49.12 % less than its net profit during the same period in the previous year. For the quarter ended March 2016, the company posted a net profit of Rs747.8 crore. The decline in US revenues and certain one-time expenses were attributed as reasons for the loss.
In a note to investors, Motilal Oswal said it expected Lupin’s US business to decline by 5% year-on-year due to new competition in the diabetes portfolio and likely deferral of key approvals. “EBITDA margin is expected to shrink to 24.8% in FY18 versus management guidance of 26 -28% as it will be difficult to compensate for the loss of the high -margin US business,” the note said.
Edelweiss said the pricing pressure and concentration risk in the US portfolio will render growth challenging in FY18/19. “Not only will growth dip, margin trajectory too will be difficult to maintain due to falling in these lucrative US products and R&D expenses inching up,” Edelweiss said in a note.
The stock hit a 34 month low and ended the session at Rs1,137.95. From the beginning of the year till date Lupin has fallen by 23.3% against Sensex rise of 15.5%.
A total of 88.86 lakh shares were traded on BSE and NSE, this is much higher than its six-month average daily volume of 9.98lakh shares.
Among the 43 analysts who track the stock 27 have given it a ‘Buy’, while 11 has given a ‘Hold’ and the remaining five given it a ‘Sell’ rating.