Lupin Limited — Q2 FY26 earnings call

Call held 7 Nov 2025

Management summary

Lupin delivered a record Q2 FY26, with revenues exceeding INR 7,000 crores and EBITDA over INR 2,100 crores, driven by strong performance across all key markets, particularly the US. Significant margin expansion to 31.3% was achieved through a favorable product mix and operational efficiencies. The company is strategically investing in complex products, biosimilars, and specialty platforms, while also focusing on regulatory compliance and ESG initiatives, though it anticipates some margin tempering in H2 due to increased R&D and lower PLI income.

Highlights

  • Total revenue from operations exceeded INR 7,000 crores and EBITDA surpassed INR 2,100 crores for the first time in company history.

  • EBITDA margin expanded by 750 basis points YoY and 470 basis points QoQ, reaching 31.3%.

  • Q2 FY26 marks the 13th consecutive quarter of YoY growth, demonstrating business model strength.

  • US business recorded sales of USD 315 million, a growth of 41% YoY and 11.5% QoQ, one of its highest to date.

  • Gross margins improved to 73.3% in Q2 FY26, up from 69.3% in Q2 FY25 and 71.3% in Q1 FY26.

  • ROCE stood at approximately 25% at the end of Q2 FY26.

  • Achieved a S&P Global ESG score of 91 in 2025, a 15-point improvement over 2024.

Concerns

  • Overall margins in H2 FY26 are expected to be tempered by higher R&D spends and a lower PLI income.

  • Anticipate some erosion in Tolvaptan revenue in the second half of FY26 due to expected competition.

  • The biosimilars portfolio currently has a negative 'burn', though not described as 'hugely negative'.

Key financials

  1. Revenue from Operations ₹7,048 Cr +24%YoY
  2. EBITDA ₹2,138 Cr +63%YoY
  3. EBITDA Margin 31.3% +7.5%YoY
  4. Gross Margins 73.3% +4%YoY
  5. R&D Spend ₹509 Cr
  6. R&D as % of Sales 7.5%
  7. Employee Benefit Expenses ₹1,106 Cr +9.7%YoY
  8. Manufacturing & Other Expenses ₹1,980 Cr +18.8%YoY
  9. Other Operating Income ₹216 Cr
  10. ROCE 25%
  11. Operating Working Capital ₹7,730 Cr
  12. Net Cash ₹1,665 Cr

What they filed

Q1 FY27: revenue up 25.6%, net profit up 27.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4,106 4,208 4,486 5,709 4,068 −1%4,501 +7%5,235 +17%7,172 +26%
EBITDA1,115 1,411 1,746 2,730 1,176 +5%1,617 +15%2,282 +31%3,733 +37%
Net profit808 985 1,291 2,128 1,357 +68%717 −27%2,164 +68%2,715 +28%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • US Business
    315 Mn Revenue
  • India
    3.4% Revenue Growth8.8% Core Prescription Business Growth10.7% Normalized Domestic Growth (H1)
  • Other Developed Markets
    ₹812 Cr Revenue26.8% Europe Growth (Q2FY26)
  • Emerging Markets
    45% Revenue Growth141% Brazil Growth (local currency)
  • GIB Business
    9% Revenue Growth

Capital allocation

high confidence
  • Capex $250 Mn
    • Investment in Coral Springs site for respiratory products (Respimat, Ellipta franchise, MDI line) $250 Mn
    First on the investment in the U.S. that we announced the USD 250 million a combination of both Capex as well as pipeline is for the Respimat as well as Ellipta franchise which we had planned to commercialize from our U.S. Coral Springs site.
  • M&A VISUfarma Acquisition · Announced

    Expand European footprint, build global specialty franchise, enhance growth and margins, add diversity across key European markets, bring global specialty business to USD 150 million annualized revenues next year.

    Expected to bring global specialty business to USD 150 million annualized revenues next year.

    The planned acquisition of VISUfarma, with its portfolio of 60 plus innovative eye health products and established infrastructure, aligns well with our strategy to expand a European footprint and build a global specialty franchise. This acquisition, expected to close by 2025, will enhance both growth and margins, adding diversity across key European markets. It will bring our global specialty business to USD 150 million annualized revenues next year, starting to build some scale.
  • Liquidity Cash ₹1,665 Cr Net cash increased from INR 310 crores on March 31, 2025, to INR 1,665 crores as of September 30, 2025.
    Net cash stood at INR 1,665 crores as against INR 310 crores on 31st March 2025.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 25% to 26%

    Previously 24% to 25% → 25% to 26%

    We expect full-year EBITDA margins to be in the range of 25% to 26%, higher than our earlier guidance of 24% to 25%.

    — Ramesh Swaminathan

  • EBITDA Margin Profitability · FY27 · High confidence 24% to 25%
    But overall, there would be we would be able to kind of keep to the margins that we are speaking about.

    — Ramesh Swaminathan

R&D

  • R&D Spend as % of Sales R&D · FY26 · High confidence 7.5% to 8.5%
    For the full-year, as indicated, we expect R&D to be around 7.5% to 8.5%.

    — Ramesh Swaminathan

Taxation

  • Effective Tax Rate (ETR) Taxation · FY26 · High confidence 21% to 22%
    For the full-year, we expect ETR to be around 21% to 22%.

    — Ramesh Swaminathan

Revenue

  • US Business Revenue Revenue · FY26 · High confidence over USD 1 billion
    we should be, close to between USD 275 million to USD 300 million per quarter to close over USD 1 billion as we have guided in the past.

    — Vinita Gupta

Product Mix

  • Share of Complex Products in US Business Product Mix · next few years · Medium confidence double
    Altogether, this sets us on track to double the share of complex products in our U.S. business over the next few years.

    — Vinita Gupta

Market Share

  • India Formulations Outperformance vs IPM Market Share · High confidence 1.2 to 1.3 times
    We remain confident that our India formulations business will continue to outperform the IPM by 1.2 to 1.3 times as we have stated in the past, supported by our 10,000 plus strong sales force.

    — Vinita Gupta

Product Pipeline

  • Biosimilars in US Market Product Pipeline · by fiscal year '30 · High confidence at least five products
    In addition, we expect our biosimilars portfolio to start positively contributing to U.S. revenues from fiscal year '27, and we target to have at least five products in the market by fiscal year '30.

    — Vinita Gupta

Product Launch Timeline

  • Pegfilgrastim Launch Product Launch Timeline · Q3 FY26 · High confidence next couple of weeks (end of November)
    On the biosimilars front, Pegfilgrastim is in the next couple of weeks. We have a goal date in end of this month. So that will be our first one.

    — Vinita Gupta

  • Ranibizumab Launch Product Launch Timeline · FY27 · High confidence middle of next year
    We have Ranibizumab middle of next year, the goal date.

    — Vinita Gupta

  • Eylea® Launch Product Launch Timeline · FY28-FY29 · High confidence fiscal year '28 or early FY29
    Eylea® is fiscal year '28 or fiscal year '29. I think it's at the tail end of FY28, early FY29.

    — Vinita Gupta

  • Etanercept Launch Product Launch Timeline · by FY29 · High confidence within five-year timeframe
    Fifth will be Etanercept, because of the submarine patent in the U.S. is out to FY29. But we'll expect to launch Etanercept as well in the five-year time frame.

    — Vinita Gupta

Revenue Growth

  • Europe Growth Rate Revenue Growth · 3 to 5 year basis · Medium confidence 20% plus every year
    So, Europe in particular, we have a pretty strong portfolio pipeline of products to drive growth, and we would love to grow 20% plus every year, but I'd say at least on a three to five year basis we should see higher than the company average growth rate in countries in Europe, facilitated now with the VISU acquisition as well.

    — Vinita Gupta

Market context

  • Global Specialty Business Annualized Revenue Revenue · next year · High confidence USD 150 million
    It will bring our global specialty business to USD 150 million annualized revenues next year, starting to build some scale.

    — Vinita Gupta

What to watch in Q3 FY26

Tolvaptan Revenue Trajectory

next quarter (H2 FY26)
Current USD 315 million in Q2 FY26
Target USD 275-300 million per quarter

Why it matters

Tolvaptan is a key revenue contributor in the US, and its performance post-exclusivity will indicate the impact of new competition.

So, as we look at the next couple of quarters, the second half, we certainly think that we'll have some erosion from this USD 315 million, but we should be, close to between USD 275 million to USD 300 million per quarter to close over USD 1 billion as we have guided in the past.

Risks & concerns

  • Tolvaptan competition post-exclusivity

    medium

    180-day exclusivity for Tolvaptan is ending, and some competition is expected, which may lead to revenue erosion in H2 FY26.

    Management acknowledged

  • Albuterol competition

    medium

    While Albuterol has stabilized, Amneal is likely to enter the market, which could cause further erosion.

    Management acknowledged

  • Spiriva Medicare access challenges

    medium

    The company has struggled to gain good access on the Medicare front for Spiriva, despite government focus on biosimilars and generics.

    Management acknowledged

  • Nagpur Unit 2 OAI status

    medium

    The company is actively addressing the Official Action Indicated (OAI) status at its Pithampur Unit 2 facility.

    Management acknowledged

  • H2 FY26 margin tempering

    low

    Overall margins in H2 FY26 are expected to be tempered by higher R&D spends and a lower PLI income.

    Management acknowledged

Q&A highlights

7 direct
Tolvaptan revenue trajectory and key US launches for H2 FY26 and FY27 Direct
So, as we look at the next couple of quarters, the second half, we certainly think that we'll have some erosion from this USD 315 million, but we should be, close to between USD 275 million to USD 300 million per quarter to close over USD 1 billion as we have guided in the past. And then in terms of new launches, just recently we launched the authorized generic to Ravicti®, which is a material launch for us. We are about to launch the Risperdal Consta® product in the next couple of weeks. We have an upcoming goal date for Pegfilgrastim, for which we had a recent inspection at the biotech facility. Feel pretty good about that, so that should be coming up. Victoza® was just launched, so we'll see the ramp up of that. So, injectables certainly, Ravicti® plus biosimilars into the next couple of quarters, and then Ranibizumab next year, we feel pretty good about sustaining a USD 1 billion plus level into fiscal year '27.

Provides specific revenue expectations for a key US product (Tolvaptan) and outlines the pipeline of new launches expected to contribute to US revenue in the near future.

Asked by Kunal Dhamesha

EBITDA margin guidance for FY27 Direct
We expect a reduction in the second half. But we have also said in the same breath that there would be an increase in the R&D expenditure. But we do expect the R&D expenditure next year to kind of normalize a little vis-a-vis, in fact, the second half. And given the fact that we expect some of the products to kind of sustain the momentum, we would think that we would be able to close at around 24% - 25% next year as well.

Clarifies the company's long-term EBITDA margin outlook, indicating a slight tempering in H2 FY26 due to R&D but a stable range for FY27.

Asked by Kunal Dhamesha

Nagpur facility inspection and its importance for future growth Direct
The audit was for our injectable facility. So, we've obviously submitted the response. And I think the next update where we've made a lot more progress actually goes in today. We're not happy with the observations, but we believe that they are addressable. We're obviously putting our best foot forward at this point of time with the response. And we hope that it will suffice. It is important, both for our injectables, which are just starting to build at this point of time and some of our biotech products as well. The facility is important and obviously we want to keep it in a state of good compliance. Obviously, we're going to do whatever it takes to get it to the finish line.

Addresses regulatory compliance for a critical manufacturing facility that is key for the company's injectable and biotech product pipeline.

Asked by Kunal Dhamesha

Mirabegron run rate and outlook on its trial outcome Partial
It is hard to predict how the judge will rule, or the jury will rule. But based on the trial that we have seen so far, I mean, in the case of MSN that settled, and Ascent last week. We feel pretty good about not really seeing any new entrants in the near term. And then, as our trial date comes closer, we'll see how the rest of the competitive base is going to really factor the risk for the launches. But we also feel good about the fact that our case where we have a number of defences on the non-infringement front, we feel pretty good about it as the trial comes closer. Usually, jury trials don't go on for months, but the decision from the jury is hard to predict if they’re going to make the decision right away.

Provides insight into the competitive landscape and legal risks for Mirabegron, a significant product, though the trial outcome remains uncertain.

Asked by Bino Pathiparampil

Strategic rationale and portfolio addition from VISUfarma acquisition Direct
First, it expands our footprint in Europe, adding Italy and Spain. Second, ophthalmology is a specialty franchise we've been excited about, and VISUfarma helps build this franchise. Third, there are pipeline synergies from VISU into other markets, particularly emerging markets like Mexico. So, a combination of expanding our footprint in Europe, as well as building on the specialty franchise with ophthalmology and operating leverage through global maximization of portfolio.

Explains the strategic fit and expected benefits of the VISUfarma acquisition for expanding Lupin's European presence and specialty portfolio.

Asked by Shyam Srinivasan

Biosimilars market positioning and infrastructure for Pegfilgrastim and Ranibizumab Direct
So, on Pegfilgrastim, actually, there's been a lot of interest from partners that are in the oncology space already. And just given the dynamics of the biosimilars market where a new product coming in, even after multiple competitors can set a reasonable ASP, we see tremendous opportunity, in terms of share. Certainly, it's going to be a smaller percentage compared to other products where we'll have limited number of players. But in terms of dollars, it should be a nice contributor into the next couple of years, fiscal year '27 as well as fiscal year '28. So, Pegfilgrastim in particular, we plan to partner, so we're not going to build any commercial infrastructure. But on the ophthalmic front with Ranibizumab, where again we see an opportunity of launching at a reasonable price, I'd say, that gives room both for the providers as well as for us as a manufacturer. We expect to have some infrastructure to be able to sell through to the ophthalmic distributors and also ensure that we get the fulfilment. Given the fact that we have two biosimilar products, both Ranibizumab and Eylea®, we're going to make not a material but a small investment in commercial team that can position the products.

Details the go-to-market strategy for key biosimilar products, distinguishing between partnering for Pegfilgrastim and building limited ophthalmic infrastructure for Ranibizumab.

Asked by Neha Manpuria

Semaglutide opportunity and market dynamics, including capacity Direct
See, India is the key market from the near-term perspective. Longer term, we'll obviously play in the developed markets. But South Africa as well, next year. South Africa is the other market that we have. I think these will be the two key markets, maybe at some point of time in Philippines, but that's it. But I think what will really make a difference is largely India and a little bit of South Africa. And from a capacity standpoint, they are in-licensed both for India as well as South Africa. I mean, like we said, they're partnered, but we don't see a capacity concern.

Outlines the company's strategy and target markets for Semaglutide, a high-potential diabetes product, and addresses capacity concerns.

Asked by Saion Mukherjee

Stabilization of Albuterol and Spiriva, and outlook on competition Direct
So, Albuterol has stabilized, but we see Amneal will likely come in at some point in time. So, there will be further erosion. On Spiriva®, our share has stabilized. At the same time, there is this new momentum of the government, U.S. administration, trying to focus on biosimilars and generics as a priority for CMS business, which is where we are struggling right now on Spiriva®. We haven't been able to get good access on the Medicare front. We are hopeful that we will be able to drive additional share with this new momentum in the quarters ahead. We haven't heard of any material progress of a competition. We are certainly not hearing from our customers that anyone is close to launching into the Spiriva® market anytime soon.

Provides an update on the competitive landscape and market dynamics for key respiratory products, Albuterol and Spiriva, including potential future challenges and opportunities.

Asked by Saion Mukherjee

3 min read 6 chapters

Detailed narrative

Record Q2 FY26 Performance and Margin Expansion

Lupin achieved a record Q2 FY26, with total revenue from operations exceeding INR 7,000 crores and EBITDA surpassing INR 2,100 crores for the first time in its history. This robust performance was driven by broad-based growth across all key markets. The company's EBITDA margin expanded significantly to 31.3%, marking an increase of 750 basis points YoY and 470 basis points QoQ, primarily attributed to a favorable product mix, lower share of in-licensed products, and improved operational efficiencies.

Strong US Business Growth and Complex Product Pipeline

The US business delivered one of its highest revenue figures to date, reaching USD 315 million, reflecting a 41% YoY and 11.5% QoQ growth. This was bolstered by new product launches such as Tolvaptan, where Lupin continues to enjoy first-to-file exclusivity, and Mirabegron. The company also secured successful approvals for several complex injectables, including generic Victoza and Risperdal long-acting injectable, and aims to double the share of complex products in its US business over the next few years.

India Formulations Outperformance and R&D Focus

India revenues grew 3.4% YoY, with the core domestic formulations business delivering a healthy 8.8% growth, outperforming the IPM growth by 1.2 times. When normalized for the impact of loss of exclusivity on certain products, domestic growth stood at a robust 10.7% YoY for H1. R&D spend for the quarter was INR 509 crores, representing 7.5% of sales, with approximately 70% directed towards complex and specialty platforms. The company plans over 80 new product launches, including GLP-1s like Semaglutide, in the coming years.

Strategic Expansion in Europe and Emerging Markets

Other Developed markets, including Europe, Canada, and Australia, collectively delivered 19% YoY growth, with Europe being a standout performer, growing 26.8% YoY for Q2 FY26. The planned acquisition of VISUfarma, expected to close by 2025, is set to expand Lupin's European footprint and build a global specialty franchise, aiming for USD 150 million in annualized revenues next year. Emerging markets also demonstrated impressive growth of 45% YoY, significantly led by Brazil's 141% growth in local currency.

Commitment to Compliance and ESG Leadership

Lupin received VAI (Voluntary Action Indicated) status for its Pithampur Unit 3 respiratory facility and is actively addressing the OAI (Official Action Indicated) at Unit 2, underscoring its commitment to maintaining the highest global quality and regulatory standards. On the ESG front, the company achieved a remarkable S&P Global ESG score of 91 in 2025, a 15-point improvement over 2024. This achievement positions Lupin as a leader in the pharmaceutical industry for sustainability and responsible growth.

Capital Investments for Future Growth and Biosimilars Pipeline

The company announced planned investments of USD 250 million in the US, combining Capex and pipeline, for its Coral Springs site. This investment is aimed at catering to anticipated demand for respiratory products, including the Respimat and Ellipta franchises, and establishing an MDI line. Lupin is also making significant progress on its biosimilars portfolio, with Pegfilgrastim expected to launch in the next few weeks and Ranibizumab in the middle of next year, targeting at least five products in the US market by FY30.

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