Lupin's consolidated Q3FY18 PAT drops by 65% yoy; shares touch 52-week low

Lupin missed analysts’ estimate during third quarter ended December 2017 (Q3FY18) result performance by reporting 65% year-on-year (YoY) decline in consolidated profit after tax (PAT). 
 
Lupin's consolidated PAT more than halved in Q3FY18 to Rs 221.7 crore, down by 65% from Rs 633.1 crore, in the corresponding period of the previous year. Also, Q3FY18 net profit tumbled by 51.3% from Rs 455 crore in the preceding quarter. 
 
Consolidated total revenue stood at Rs 3,975.7 crore, witnessing decline of 11.3% year-on-year (YoY), but gradually up by 0.6% on quarter-on-quarter (QoQ) basis. 
 
Consolidated EBITDA (operating profit) stands at Rs 716.8 crore, declining by 45.8% yoy and 22.7% qoq. 
 
Nilesh Gupta, Managing Director, Lupin Limited, said, “The quarterly performance was muted on the back of business mix as well as forex losses. We continue to grow strong in all our markets while the US business is now starting to stabilize at the current level."
 
Here're the key highlights from Lupin's Q3FY18 financial performance.

• Material cost increased by 250 basis points to 35.7% of sales at Rs 1,392.7 crore compared to Rs 1,286.5 crore in Q2FY2018
• Personnel cost decreased by 90 bps to 17.8% of sales at Rs 693.1 crore compared to Rs 725 crore in Q2FY2018
• Manufacturing and other expenses increased by 270 bps to 30.8% of sales at Rs 1,201.5 crore compared to Rs 1,087.4 crore in Q2 FY2018
• Investment in research for the quarter was Rs 475.7 crore representing 12.2% of sales
• Operating working capital increased to Rs 5,761 crore as of December 2017 compared to Rs 5,713.9 crore  as of September 2017. 
• Capital Expenditure for the quarter was Rs 254 crore.
• Net Debt-Equity ratio for the company stands at 0.40:1

On geographical basis,  North America sales grew by 5.2% to Rs 1,432.1 crore during Q3 FY2018 compared to Rs 1,361.1 crore during Q2FY2018 and decreased by 34.2% compared to Rs 2,175.5 crore during Q3 FY2017; accounting for 37% of Lupin’s global sales.
 
India formulation sales decreased by 7.8% to Rs 1,068.8 crore during Q3 FY2018 compared to Rs 1,159.3 crore during Q2 FY2018 and increased by 7.8% compared to Rs 991.2 crore during Q3 FY2017, accounting for 27% of Lupin’s global sales.
 
Lupin’s Asia-Pacific sales grew by 6.0% to Rs 674.2 crore during Q3 FY2018 compared to Rs 635.7 crore during Q2 FY2018 and increased by 20.4% compared to Rs 560.1 crore during Q3 FY2017, accounting for 17% of Lupin’s global sales.
 
Lupin’s Europe, Middle-East and Africa (EMEA) sales decreased by 1.3% at Rs 272.1 crore during Q3 FY2018 compared to sales of Rs 275.8 crore during Q2 FY2018 and increased by 6.5% compared to Rs 255.5 crore during Q3 FY2017, accounting for 7% of Lupin’s global sales.
 
Gupta said, "Our near-term priorities are to successfully commercialize Solosec, resolve the warning letter on Goa and Indore Unit 2 and continue to evolve our complex generic pipeline while accelerating growth in our other markets.” 
 
Post Q3FY18 announcement, share price of Lupin touched a 52-week low of Rs 798.10 per piece. However, the share price closed at Rs 801.65 per piece on the BSE, down by Rs 50.25 or 5.90%.