Pharma major Lupin fell 0.26% to close at Rs 720.50 after consolidated net loss stood at Rs 835 crore in Q3 December 2019 (Q3 FY20), higher than net loss of Rs 151.75 crore reported in Q3 December 2018 (Q3 FY19).
Net sales declined 4.51% year-on-year (Y-o-Y) to Rs 3,769.27 crore in Q3 FY20. The Q3 earnings were disclosed during market hours today, 6 February 2020.
Consolidated pre-tax loss stood at Rs 106.82 crore in Q3 FY20 compared with pre-tax profit of Rs 83.40 crore reported in Q3 FY19. Total tax expenses jumped 212.55% to Rs 767.02 crore during the period under review.
EBITDA slipped 27.6% to Rs 522.70 crore YoY. The EBITDA margin stood at 14.1% in Q3 FY20 as against 18.9% in Q3 FY19.
During the quarter, investments in Research & Development (R&D) for the quarter stood at Rs 427.70 crore (or 11.5% of sales). Lupin received approvals for 4 ANDA (Abbreviated New Drug Applications) from the United States Food and Drug Administration (USFDA) during Q3 December 2019. Cumulative ANDA filings with the USFDA stood at 424 as of 31 December 2019, taking the total to 272 approvals till date.
Now, the company has 43 First-to-Files (FTF) filings including 14 exclusive FTF opportunities and cumulative Drug Master File (DMF) filings at 207 as of 31 December 2019.
As of 31 December 2019, net debt-equity ratio for the company stands at 0.08:1.
Commenting on the Q3 numbers, Nilesh Gupta, the managing director of Lupin, has said that, There are a lot of one-times in the numbers this quarter. The reported performance was significantly affected by exceptional events, including the impairment of the Gavis portfolio and our divestiture of Kyowa. Sequentially, the profitability in the quarter was impacted by lumpiness in some of the spend but we see improved margins hereon. The resilience of the India branded business, stabilization of the US generic base business and growth in new launches will drive growth for the Company. Quality remains our top-most priority and we are making steady progress on remediation measures across our manufacturing footprint.
Lupin's India formulation sales stood at Rs 1,296.90 crore in Q3 December 2019 as compared to sales of Rs 1,341.90 crore during in Q2 September 2019 and Rs 1,190.20 crore during in Q3 December 2018; accounting for 35% of Lupin's global sales.
North America sales were Rs 1,376.60 crore in Q3 December 2019 compared to sales of Rs 1,324.40 crore during in Q2 September 2019 and Rs 1,470.40 crore during in Q3 December 2018; accounting for 37% of Lupin's global sales.
Lupin's global Active Pharmaceutical Ingredients (API) sales were Rs 317.30 crore for in Q3 December 2019 as compared to Rs 305.20 crore during in Q2 September 2019 and Rs 362.40 crore during in Q3 December 2018, accounting for 8% of Lupin's global sales.
The firm operates in one reportable business segment i.e. Pharmaceuticals. During the quarter, exceptional items pertained to impairment of Rs 1,579.77 crore related to certain acquired IPs and profit Rs 1,291.09 crore on divestment of the its entire stake in Kyowa Pharmaceutical Industry Co., Japan.
The exceptional items for the quarter ended 30 September 2019, pertains to the settlement amount of Rs 379.18 crore with respect to State of Texas lawsuit in the USA and loss of Rs 167.30 crore on divestment of the company's entire stake in Kyowa CritiCare Co., Japan.
The exceptional items for the period ended 31 March 2019, pertains to provision for fine to European commission.
Due to the occurrence of the above, there was a significant reduction in leverage and Return on Capital Employed (ROCE) improved 70 bps, on utilization of surplus cash proceeds for reducing leverage.
After the adjustment of IND-AS accounting methods, amortization expense lowered to Rs 170 crore in the consolidated financials on an annualized basis and ROCE improved 220 bps on the revised asset base.
Lupin is engaged in producing, developing and marketing a range of branded and generic formulations, biotechnology products and active pharmaceutical ingredients (APIs) across the world. The firm offers products in the cardiovascular, diabetology, asthma, pediatrics, central nervous system, gastro-intestinal, anti-infectives and non-steroidal anti-inflammatory drug therapy areas.
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