Lupin CFO Swaminathan Forecasts Margin At 21% For FY25

Lupin Ltd., which reported results in the first quarter of fiscal 2025, expects to see profit margins improving in the current fiscal.

The leading pharmaceutical company reported strong growth in revenue and net profit for the quarter ended June 2024, riding on resilience across geographies.

Ramesh Swaminathan, executive director and global chief financial officer and head of API Plus at Lupin, has projected a 21% margin guidance for FY25. On the margins, he noted that R&D expenditure was lower than expected in the quarter under review and it may go up.

“We expect R&D spending to increase, and we would rather guide prudently. While we initially guided for about 20% margins, I would say 21% for the current year would be fair at this stage,” he said, cautioning about potential headwinds due to geopolitical tensions globally.

Lupin Q1 FY25 Highlights (Consolidated, YoY)

• Revenue up 16.33% to Rs 5,600 crore versus Rs 4,814 crore.

• Ebitda up 50.2% to Rs 1,286.4 crore against Rs 856.5 crore. 

• Net profit at Rs 801.3 crore up by 77.2% from Rs 453.2 crore.

In an interview with NDTV Profit, expressing satisfaction with the results, Swaminathan said, “We are very pleased with the results. There has been buoyancy in the topline across all geographies. North America and the API segment have done extremely well, and India also saw a growth of 17.5% compared to the previous year.”

He attributed this success to the company’s focus on introducing newer, more complex generics and stringent cost control measures. “Our emphasis on productivity across all lines, whether in sales or R&D, has resulted in a very good Ebitda margin for us,” said Swaminathan.

During the quarter, Lupin allocated Rs 75 crore towards the settlement of a class-action lawsuit in the US related to its diabetes drug, Glumetza.

“Hopefully, the entire Glumetza story is over. The class suit in America is fully settled, and with that, we are done,” Swaminathan said.

Lupin’s North American business was a significant growth driver, with revenue from the region reaching Rs 2,040.8 crore, marking a 28% year-on-year increase.

Elaborating on the outlook for the US market, Swaminathan said, “We have a strong pipeline to address the American market, pivoting to more complex products. Given the nature of complexity associated with these products, they won’t erode fast and will continue to have a good run. We expect to introduce several new products, including respiratory products and injectables, in the coming months, and a billion-dollar market is certainly within our reach.”

Looking ahead, Swaminathan highlighted Lupin’s strategic focus on inorganic growth in India and its commitment to specialty areas. He said the company has set its eyes on specialty, which he thinks would be the way forward for Lupin.

Shares of Lupin Ltd surged as much as 6.18% on Wednesday to hit a fresh 52-week high of Rs 2,025 apiece on the BSE after the company’s strong performance in the first quarter of FY25. The pharma stock closed 4.49% higher at Rs 1,992.7 per share on the BSE.