Lupin posted results lower than expected. Sales came in at Rs4,212cr vs. Rs4,300cr
expected, registering a yoy growth of 31.9%, mainly aided by exports. The sales
growth was driven by Formulations sales (Rs3,919.3cr), posting a yoy growth of
37.1%; while API sales (Rs291.9cr) posted a yoy de-growth of 12.3%. On the
operating front, the EBITDA margin came in at 22.5% vs. 24.3% expected vs.
16.5% in 2QFY2016. The OPM contracted in spite of the gross margin
expansion, which came in at 70.5% vs. 70.5% in 2QFY2016, on the back of
35.9% and 32.8% yoy growth in the employee and other expenses, respectively.
Consequently, the Adj. PAT came in at Rs662cr vs. Rs758cr expected vs. Rs420cr in
2QFY2016, a yoy growth of 57.8%. We maintain our Buy rating on the stock.
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