Lupin Limited

Lupin reported a strong Q3 FY25, with revenues reaching INR 5,619 crores, marking a 10.6% YoY growth. The company achieved its highest EBITDA margins in the last 5 years at 24.3%, expanding 420 basis points YoY. Gross margins also improved to 69.4% from 66.0% in Q3 last year, driven by a better product mix, tailwinds on input costs, and increased efficiencies. Management expressed confidence in maintaining growth momentum and achieving EBITDA margins in the 23-23.5% range for the current fiscal year.

The US business delivered robust growth, with sales reaching USD 235 million, a 10.5% YoY and 6.8% QoQ increase, marking a five-year high. This growth was fueled by volume increases in inline products and contributions from new products like Mirabegron, offsetting anticipated competition in Albuterol and Suprep®. The respiratory portfolio continued its strong performance with high market shares. Lupin anticipates double-digit growth for its US business in FY25, driven by an exciting pipeline including Tolvaptan (expected H1 FY26) and injectables like Glucagon, Risperdal Consta, and Liraglutide (expected H2 FY26).

India's business grew by 11.9% YoY in Q3 FY25, with the India Formulation business recording a 9.1% growth for the first nine months of FY25, outperforming the IPM growth of 8.2%. Key therapies such as Diabetes, Cardiac, and GI grew ahead of the market. The company strengthened its diabetes portfolio by acquiring the Huminsulin range of products from Eli Lilly and three trademarks from Boehringer Ingelheim, enhancing its portfolio of innovative medicines and market reach. Muted growth in the respiratory category, however, affected overall performance during the quarter.

R&D spend for Q3 FY25 was INR 434 crores, representing 7.7% of sales, with almost two-thirds directed towards complex products. The company expects full-year R&D to be around INR 1,750-1,800 crores, with a significant increase in Q4. From a compliance perspective, Lupin received an EIR from the USFDA for its Pithampur Unit-1 manufacturing facility with a VAI classification. Other sites like Aurangabad, Dabhasa, Somerset, and Nagpur Injectable Facility also successfully completed inspections with zero observations, underscoring the company's commitment to regulatory standards.

Lupin reported a net debt of INR 103 crores as of December 31, 2024, down from INR 477 crores on March 31, 2024, effectively becoming a debt-free company. This financial strength enables strategic capital allocation, with a focus on building a specialty business in the US through acquisitions and internal development. The company is comfortable with bite-size acquisitions in the USD 200-250 million range, prioritizing India and specialty assets. Investments are also directed towards green propellant programs for its respiratory franchise and evolving its innovation pipeline.

In the last quarter, Lupin strengthened its ESG efforts, focusing on environmental and social areas. The company's operations remain 'Water Positive' year after year, and efforts to reduce Scope 1 and Scope 2 emissions through renewable energy projects are ongoing. Lupin received a Leadership ESG Score of 'A-' by CDP for Climate and Water, an improvement from last year's 'B' rating in Climate and 'C' rating in Water. The 'Lives Program' has benefited over 99,500 individuals, providing rural healthcare services to marginalized communities.