Lupin Shares Slip By Up To 9% On Weak Q4 Performance, Hit Fresh 52-Week Low

Shares of Lupin in early trade on May 19, 2022 slipped to its fresh 52-week low of Rs. 621.8, dropping as much as 9%. In the previous session, pharma company shares settled at a price of Rs. 683.3 per share on the NSE.

The sharp losses in the scrip have come off after the company's weak March quarter performance. Lupin (LPC)'s 4QFY22 revenue rose 2.6% YoY to about INR39 billion.The US sales declined 5.3% YoY to INR14b (down 7% in CC to USD181m; 37% of sales). The US sales dropped 10% sequentially from USD202m in 3QFY22. API sales declined 14% YoY to INR2.2b (5.7% of sales); Domestic Formulation (DF) sales grew 5% YoY to INR13.5b (35% of sales); EMEA sales rose 8.6% YoY to INR4b (10.5% of sales) and Growth Market sales increased 26% YoY to INR3.8 (10% of sales).

Gross margin (GM) for the company contracted 530bp YoY to 58% due to change in product mix. Adjusting for reversal of litigation-related one-time expense (of INR12m), EBITDA margin contracted at a higher rate of 1,280 bp YoY to 5.9% due to reduced operating leverage (other expense/employee cost +650bp/+120bp YoY as a % of sales, respectively).EBITDA declined 67.8% YoY to INR2.3b (our est. at INR5.3b). LPC has taken an expense on account of the impairment of Gavis IPs to the tune of INR1.3b.Adjusting for the aforementioned exceptional items, LPC reported a loss of INR24m, due to higher tax outgo.

Post the results, Motilal Oswal maintains a neutral view on the stock.

Last at around 9:51 am, Lupin shares traded at Rs. 629.6, down by close to 8%.