Lupin: US & Japan strong show adds shine to company's show

A strong show in two key markets, US and Japan, helped boost the performance of drugmaker Lupin, one of the most consistent performers in the Indian pharma sector, in the quarter to December 31, 2012.

New launches, especially in the oral contraceptives category, the launch of the generic, Tricor, and the improved performance of some of its existing products aided the growth of its revenues in the US. The performance of its branded business in the US, constituting one-fourth of its total business there, was boosted by a strong pick-up in the sales of its flagship brand, Suprax, due to a lucrative flu season.

The performance of its domestic business, contributing nearly one-fourth of the total consolidated revenues, was a reflection of the overall vagaries the Indian pharma industry has been facing in the recent quarters. Growth stunted to 14%, marginally higher than the industry’s growth.

While the company performed strongly in the chronic segments, it suffered a setback in the acute segment, including in its TB portfolio, due to supply chain issues. At 24.5%, the company has managed to improve its operating profit margins year-onyear as well as sequentially.

The company’s profits grew 43% despite higher taxation, the impact currency-related forex loss on the bottom line and higher cost of goods sold. While these are unsustainable growth figures, Lupin expects to grow its total revenues at an average steady rate of 20-25%, with its US business growing at 30-35% annually.

The company has a strong pipeline of products in the US market, a majority of them being para IV filings. In the domestic market, the management is hopeful of sustaining growth at close to 18-19% in the quarters ahead.

The company can improve profitability by shifting manufacturing for the Japanto India, ramping up growth in India and adding more promising products to its branded business in the US.