Lupin Trades Weak On Worries Over US Business

As per market observers, the markets are in correction mode and the analysts believe that the major indices in the markets may trade lower for next few trading weeks.

The sell-off in pharma stocks was responsible for the losses of Nifty and Sensex. The pharma major, Lupin Limited is trading lower by around 7% at Rs 1144.9 per share as of 0952 hours on Thursday. The stock, however, has lost around 10% in past five trading sessions and around 16% in past three months.

As per reports of market analysts, the Lupin’s US business may face decline by around 14-15% in FY18. Analysts are worried about the price environment in the US market and continuing decline in the company’s two key products, Glumetza and Fortamet. The price erosion in the US markets may lead to pressure on company’s EBITDA margins.

Lupin Limited posted its Q4 FY17 results. The consolidated revenue for the quarter came in at Rs. 4162 crores, registering 1.3% Y-o-Y increase.

EBITDA for the quarter fell by 43.7% Y-o-Y to Rs. 690 crore with a corresponding margin contraction of 1327 bps. EBITDA margin for the quarter stood at 16.6%. This margin contraction was driven by an increase in other expenses and employee benefits expenses by 30% Y-o-Y and 24% Y-o-Y respectively.

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