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May 7, 2024

Lupin’s Q4 Earnings Fall Short, Shares Drop 5% as Investors React

Shares of pharmaceutical giant Lupin tumbled 5.2% to Rs 1,591 on the BSE as its quarterly earnings failed to meet market expectations. The Mumbai-based company reported a consolidated net profit of Rs 359.43 crore for the January-March quarter of FY24, marking a 52% year-on-year increase. However, this figure fell short of analysts’ expectations, triggering a bearish sentiment among investors.

Lupin’s revenue for the quarter stood at Rs 4,895.11 crore, showing a 13% increase from the same period last year. Despite this growth, analysts anticipated higher figures, with profit projections ranging from Rs 494 crore to Rs 570 crore and revenue estimates between Rs 5,068 crore and Rs 5,146 crore.

The disappointment extended to the company’s US sales, which reported Q4FY2024 sales at $209 million, slightly below Kotak Institutional Equities’ estimate of $213 million. Lupin filed 1 abbreviated new drug application (ANDA) during the quarter, received 12 ANDA approvals from the USFDA, and launched 6 products in the US market.

However, there were positive aspects to Lupin’s performance. The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) surged by 66% to Rs 1,026.1 crore compared to Rs 615 crore in the previous year. The EBITDA margin also expanded to 21%, up from 14.2% in the year-ago period, reflecting improved operational efficiency.

Despite these positives, at 11:38 AM, Lupin’s shares were trading 5.28% lower at Rs 1,591 per share. In contrast, the S&P BSE index fell 0.69% to 73,384 levels. A total of 1,00,716 shares of Lupin exchanged hands on the BSE. The company currently has a price to earnings multiple of 35.19 times, indicating cautious investor sentiment.

In summary, Lupin’s fourth-quarter results painted a mixed picture. While there was significant growth in net profit and revenue, the figures fell short of market expectations, particularly in the US market. The company’s strong EBITDA performance suggests underlying operational strength, but investors reacted negatively to the overall earnings miss, causing a drop in share prices.

Jhumpa Lahiri

Jhumpa Lahiri

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