Lupin net skids, says Gavis deal ‘shy’ of expectations

MUMBAI: Lupin, India’s fourth-largest generic drug maker, said its $880-million acquisition of Gavis Pharma has been ‘shy’ of meeting the expectations of promoters. The company overestimated certain aspects of the business and has tapered its revenue expectations from Gavis, Nilesh Gupta, managing director of Lupin, said in an interview to ET.

Lupin’s acquisition of the US drug maker in 2015 was one of the most expensive overseas purchases by an Indian pharmaceutical firm. “We did not get certain approvals that we expected and there were certain expansions in the company that took longer.

We also overestimated the process involved to access controlled substances,” Gupta told ET after the company declared its Q4 results. The management expected Gavis to contribute close to $250 million in revenue. Gupta said revenue might not be in the range of $225-250 million. Lupin’s fourth-quarter results fell short of the Street’s expectations. Net profit declined 49% to Rs 380 crore in the March quarter from Rs 747.9 crore a year earlier.

Total revenue rose 1.3% to Rs 4,253 crore. The North American business fell 13.2% to Rs 1,900.7 crore from a year earlier and contributed 46% of sales. Gupta said Lupin’s numbers in the current fiscal would remain muted.