Debt-free Lupin is ready for big acquisition: Vinita Gupta, CEO

MUMBAI: With a debt-free balance sheet and substantial cash at its disposal, drugmaker Lupin is looking for a big-ticket acquisition, Vinita Gupta, its chief executive officer, told ET. Gupta’s reply was in response to rumours flying around that the company is in talks with British drugmaker GlaxoSmithKline to acquire some of its legacy brands — 8 of them — that the company has put up on sale. GSK expects to generate cash up to $1 billion from the transaction.
Though Lupin refused to comment on the acquisition, it didn't deny it either. Gupta maintained that Lupin would look at an acquisition that would give it therapeutic and geographical advantage.

"We are a debt-free company with cash in balance and can raise over a billion dollar-and-half," Gupta told ET. "We can afford large assets, but it depends on what we are buying. Our priority will be to acquire successful brands in the US to grow along with our generic drugs. Getting entry into markets like Latin America, particularly Brazil, eastern Europe and China is also our priority ."

Lupin is open to raising debt, equity dilution, or combination of both, in case it has to open its war chest for future acquisitions. The company has a market cap of over Rs 40,000 crore with cash in book of around Rs 900 crore. Gupta stressed that the company would look at products in the respiratory or injectibles segment to fill gaps in its portfolio.

Lupin, which recorded a 55% jump in its net profit to Rs 624 crore as against Rs 401 crore for the first quarter of FY15, has seen substantial growth across its geographical markets. The company’s net sales jumped 35% to Rs 3,284 crore; its India business, which had slumped last year, has registered a growth of 26%.

"We have launched 16 products in India and this growth is because of some of the operational changes that we underwent.” The US market, which contributes a big chunk to the company’s total revenue, grew 57% to .

Rs 1,605 crore. Despite the turnaround in the Indian market, Gupta said policy changes like the recent price cuts announced by the drug regulator threatens to stall growth of drug markets. "We are concerned about price cuts, and have joined the legal battle with other Indian companies,” she added.

Lupin’s shares closed at Rs 1,174, up 5%, at the end of Wednesday's trade.