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Q2FY12 – Medicis saves the day but margins under pressure.
• Lupin reported Q2FY12 numbers that were slightly better than street estimates. Net Sales
grew 24% to `17,724 mn in Q2FY12 from `14,340 mn in Q2FY11. This was largely aided by
an upfront payment of $20mn received from Medicis during the quarter. Excluding this
exceptional one-time payment, Sales growth was only 18% to Rs.16,502mn.
• EBITDA grew 35% to `4,040 mn in Q2FY12 from `2,987 mn in Q2FY11. EBITDA margin at
22.8% was impacted by higher staff cost (up 19% Y-o-Y) and Manufacturing & Other
Expenses (up 38%Y-o-Y).
• Lupin recorded its highest ever profit with Net PAT rising 23% to `2,718 mn in Q2FY12 from
`2,207mn in Q2FY11. PAT margin remained flat at 15.3% owing to higher R&D expenditure
(up 19% Y-o-Y) and higher tax outgo. Excluding the one-time milestone payment from
Medicis, PAT showed de-growth of 18% to `1,803 mn in Q2FY12.
Result Highlights
Strong growth across all geographies
Lupin recorded strong growth across all geographies; India 22%, US 16%, Europe 25% and Japan
14%. South Africa recorded the highest growth of 61% to Rs.679mn during Q2FY12. Lupin’s
growth rate in India (22%) outpaced the industry growth rate of 13% - 14% by far.
Suprax shines, Aerochamber disappoints
Suprax grew strongly at 43%. Suprax tablets grew 27% in prescription and 52% by revenue
whereas suspensions grew 6% by prescription. Aerochamber continued its disappointing
performance growing at just 17.5%. Approval for Suprax drops has been delayed by a few
quarters since the FDA has asked for more data.
OCs provide significant revenue visibility for the next 2-3 years
Lupin aims to target $125 mn revenue from OCs by FY14. The Oral Contraceptives (OC) market
is worth $4 bn - $4.5 bn with not more than 6-8 players. Even assuming 75% erosion, the
company looks set to achieve its target. It has plans to launch 5-6 OCs by year end. Totally,
company has filed for 30 OCs which it plans to launch over the next 2-3 years thereby providing
significant revenue visibility.
Valuation & Viewpoint
At the CMP of `473, Lupin is trading at 17x its consensus FY13E earnings. Margins look to be
under pressure due to rising wage cost and manufacturing expenses. However, a diversified
geographical portfolio, continuous product launches and a huge OC pipeline are expected to
work in company’s favour. We expect Lupin to deliver a stable and consistent growth
performance over the quarters to come
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Q2FY12 – Medicis saves the day but margins under pressure.
• Lupin reported Q2FY12 numbers that were slightly better than street estimates. Net Sales
grew 24% to `17,724 mn in Q2FY12 from `14,340 mn in Q2FY11. This was largely aided by
an upfront payment of $20mn received from Medicis during the quarter. Excluding this
exceptional one-time payment, Sales growth was only 18% to Rs.16,502mn.
• EBITDA grew 35% to `4,040 mn in Q2FY12 from `2,987 mn in Q2FY11. EBITDA margin at
22.8% was impacted by higher staff cost (up 19% Y-o-Y) and Manufacturing & Other
Expenses (up 38%Y-o-Y).
• Lupin recorded its highest ever profit with Net PAT rising 23% to `2,718 mn in Q2FY12 from
`2,207mn in Q2FY11. PAT margin remained flat at 15.3% owing to higher R&D expenditure
(up 19% Y-o-Y) and higher tax outgo. Excluding the one-time milestone payment from
Medicis, PAT showed de-growth of 18% to `1,803 mn in Q2FY12.
Result Highlights
Strong growth across all geographies
Lupin recorded strong growth across all geographies; India 22%, US 16%, Europe 25% and Japan
14%. South Africa recorded the highest growth of 61% to Rs.679mn during Q2FY12. Lupin’s
growth rate in India (22%) outpaced the industry growth rate of 13% - 14% by far.
Suprax shines, Aerochamber disappoints
Suprax grew strongly at 43%. Suprax tablets grew 27% in prescription and 52% by revenue
whereas suspensions grew 6% by prescription. Aerochamber continued its disappointing
performance growing at just 17.5%. Approval for Suprax drops has been delayed by a few
quarters since the FDA has asked for more data.
OCs provide significant revenue visibility for the next 2-3 years
Lupin aims to target $125 mn revenue from OCs by FY14. The Oral Contraceptives (OC) market
is worth $4 bn - $4.5 bn with not more than 6-8 players. Even assuming 75% erosion, the
company looks set to achieve its target. It has plans to launch 5-6 OCs by year end. Totally,
company has filed for 30 OCs which it plans to launch over the next 2-3 years thereby providing
significant revenue visibility.
Valuation & Viewpoint
At the CMP of `473, Lupin is trading at 17x its consensus FY13E earnings. Margins look to be
under pressure due to rising wage cost and manufacturing expenses. However, a diversified
geographical portfolio, continuous product launches and a huge OC pipeline are expected to
work in company’s favour. We expect Lupin to deliver a stable and consistent growth
performance over the quarters to come
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