Lupin Limited — Q4 FY26 earnings call

Call held 8 May 2026

Management summary

Lupin delivered a strong Q4 and full fiscal year FY26, achieving record sales and profitability driven by robust growth across all key geographies, particularly the US and India. The company's strategic focus on complex products, biosimilars, and specialty segments is yielding results, with a significant increase in net cash. However, Q4 saw a sequential EBITDA decline due to one-off settlement costs and higher operating expenses, and the company anticipates a higher effective tax rate in FY27.

Highlights

  • Total revenue from operations for Q4 FY26 was INR 7,475 crores, marking a 32% YoY growth and the 15th consecutive quarter of growth.

  • EBITDA for Q4 FY26 increased by 68% YoY to INR 2,171 crores, with the margin expanding by 620 basis points to 29.4%.

  • The US business achieved record sales of USD 1.3 billion for the full year FY26, representing an impressive 40% YoY growth, driven by new product launches like Tolvaptan and Mirabegron.

  • India's core prescription business grew 14.5% YoY in Q4 FY26, outperforming IPM growth by 1.3 times, with the chronic segment now accounting for 66% of the portfolio.

  • Net cash position significantly improved to INR 4,636 crores as of March 31, 2026, compared to INR 310 crores last year.

Concerns

  • Q4 EBITDA declined QoQ despite revenue growth, attributed to increased manpower costs, Astellas settlement for Mirabegron, and foreign exchange impact.

  • Effective Tax Rate (ETR) is expected to increase to 25-26% in FY27 from 22.1% in FY26 due to the phasing out of incentives on domestic facilities.

  • The diabetes segment in India grew 9.4% against a category growth of 12.2%, impacted by the loss of exclusivity for certain in-licensed products.

Key financials

  1. Total Revenue from Operations ₹7,475 Cr +32%YoY
  2. EBITDA ₹2,171 Cr +68%YoY
  3. EBITDA Margin 29.4% +6.2%YoY
  4. Gross Margins 75% +13.3%YoY
  5. R&D Spend ₹590 Cr
  6. R&D Spend (% of Sales) 8%
  7. Net Cash ₹4,636 Cr
  8. ROCE 28.4%
  9. Operating Working Capital ₹7,132 Cr
  10. Operating Working Capital Days 87 days

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

SegmentQ4 SalesFY26 Sales
US Business371 Mn1,318 Mn
India Region1,908 Mn8,114 Mn
Other Developed Markets845 Mn3,244 Mn
Emerging Markets991 Mn3,483 Mn
GIB Business——

Capital allocation

high confidence
  • Debt Net ₹4,636 Cr
    Net Cash stood at INR 4,636 crores as against INR 310 crores as of 31st March 2025.
  • M&A VISUfarma Acquisition · Integrated

    Expand presence from UK, Germany, France to Italy and Spain markets where we had no presence in. And just leveraging the presence across the ophthalmology portfolio, taking our respiratory products, our biosimilars, NaMuscla® into this market is a real opportunity for us that we see as a potential of growing our overall footprint in Europe.

    Expected to comfortably cross USD 100 million in top-line contribution within 2-3 years.

    We expect this contribution to increase as we rollout a pipeline of complex products including biosimilars and integrate our newly acquired VISUfarma business from this quarter onwards.
  • Liquidity Cash ₹4,636 Cr Focus on increased cash generation for our business, continue to explore strategic allocation of capital to ensure long term mission of the company including on the specialty front.
    Net Cash stood at INR 4,636 crores as against INR 310 crores as of 31st March 2025. Whilst we focus on increased cash generation for our business, we would like to highlight that we continue to explore strategic allocation of our capital to ensure the long term mission of the company including on the specialty front.

Guidance & targets

Revenue

  • Overall Sales Growth Revenue · FY27 · High confidence high-single digits
    As mentioned in our earlier interactions, we expect to grow our top line high-single digits with margins at around 25% in FY27, despite increased headwinds from an uncertain geopolitical environment.

    — Ramesh Swaminathan

Profitability

  • EBITDA Margin Profitability · FY27 · High confidence around 25%
    As mentioned in our earlier interactions, we expect to grow our top line high-single digits with margins at around 25% in FY27, despite increased headwinds from an uncertain geopolitical environment.

    — Ramesh Swaminathan

R&D

  • R&D Spend (% of Sales) R&D · FY27 · High confidence around 8%
    We expect R&D to be around 8% of sales for the next fiscal.

    — Ramesh Swaminathan

Tax Rate

  • Effective Tax Rate (ETR) Tax Rate · FY27 · High confidence 25% - 26%
    For FY27, we expect the ETR to be about 25% - 26% due to the phasing out of incentives on some of our domestic facilities.

    — Ramesh Swaminathan

India Business

  • India Formulations Business Outperformance vs IPM India Business · going forward · High confidence 1.2x to 1.3x
    We remain confident that our India formulations business will continue to outperform IPM by 1.2x to 1.3x going forward, supported by salesforce of about 12,000 people and a pipeline of more than 80 new product launches over the coming years including innovative in-house and in-licensed products.

    — Ramesh Swaminathan

  • Chronic Segment Share India Business · next five years · High confidence 70%

    From 66% today

    The chronic segment now accounts for 66% of our portfolio up from 64% in FY25, and we have set ourselves a target to increase this share to 70% in the next five years.

    — Vinita Gupta

US Business

  • First Biosimilar Launch US Business · FY27 · High confidence first launch
    This will be strengthened by the launch of our first biosimilars in the year US in FY27.

    — Ramesh Swaminathan

  • Product Launches (next 3 years) US Business · next three years · High confidence 50+ products, 10 exclusive first to files, 4 biosimilars, 2-3 505(b)(2)s
    In the next three years we expect to launch 50 plus products in the US with 10 exclusive first to files, four biosimilars as well as two to three 505(b)(2)s.

    — Vinita Gupta

  • Revenue US Business · FY27 · High confidence billion dollar plus
    In FY27 to be a billion dollar plus.

    — Vinita Gupta

  • Revenue Erosion US Business · current year · Medium confidence high single digit or low double-digit erosion
    We think that based on the competition that we foresee in products like Mirabegron and Tolvaptan, we should be able to get to a level compared to the current year where maybe it's a high single digit or low double-digit erosion in terms of revenues.

    — Vinita Gupta

  • Respiratory Product Filings US Business · FY27 · High confidence eight to nine product filings
    For the US we have, eight to nine product filings in FY27 on the respiratory front.

    — Vinita Gupta

VISUfarma

  • Top Line Contribution VISUfarma · two to three years · High confidence comfortably cross USD 100 million
    And the top line should comfortably cross say USD 100 million mark in two to three years If all these factors play out well?

    — Vinita Gupta

What to watch in Q1 FY27

First US Biosimilar Launch

Next quarter (Q1 FY27) or H1 FY27
Current Expected in FY27
Target Specific biosimilar launched in US

Why it matters

Marks the entry into a key growth area for the US business and validates the complex product strategy.

This will be strengthened by the launch of our first biosimilars in the year US in FY27.

Risks & concerns

  • Competition for key US products (Tolvaptan, Mirabegron)

    high

    Anticipated generic competition for Tolvaptan and Mirabegron in FY27 is factored into the 25% EBITDA margin guidance.

    Management acknowledged

  • Increased Effective Tax Rate (ETR)

    medium

    ETR expected to rise to 25-26% in FY27 from 22.1% in FY26 due to phasing out of domestic incentives.

    Management acknowledged

  • Inflationary Pressures on Costs

    medium

    Higher ocean (15%) and air (60%) freight costs, raw material price volatility due to Middle East crisis, factored into margin guidance.

    Management acknowledged

  • Challenges with Ellipta Product PK

    medium

    Difficulty in achieving product PK for Ellipta, making launch challenging, but company continues to work on Breo and Trelegy products.

    Management acknowledged

  • India Diabetes Segment Underperformance

    low

    Growth of 9.4% against category 12.2% due to loss of exclusivity for in-licensed products, though offset by other therapy areas.

    Management acknowledged

Q&A highlights

7 direct
FY27 Guidance - EBITDA margin impact from competition Direct
Yes, we have factored that in both competition for Mirabegron as well as Tolvaptan.

Clarifies the impact of anticipated competition on future profitability guidance, indicating a realistic outlook.

Asked by Tushar Manudhane

Q4 EBITDA decline QoQ despite revenue growth Direct
Essentially the EBITDA margins decline because of there's a slightly increased, manpower cost, as you can see. The second is essentially, we have captured what we have, paid out Astellas on account of Mirabegron settlement as part of the manufacturing other expenses line that's also included. And there's of course the component of foreign exchange that's been captured out there.

Explains the sequential margin compression, highlighting specific cost items and a settlement that impacted the quarter.

Asked by Tushar Manudhane

US business outlook and upcoming product launches for FY27/FY28 Direct
Apart from that, I think in the next fiscal year, our Ravicti® product, the Glycerol Phenylbutyrate (“GPB") is a material product for us in FY27. We have SaxendaⓇ that we hope to launch in the second half of the year, which would be a material product for us. So, we have 20 plus products. We have two first to files as well. We have Sacubitril Valsartan as well as Rivaroxaban both are exclusive dosage form that we have first to file on. And then another big opportunity as we look at it right now for FY27 is Pegfilgrastim for us.

Provides a detailed pipeline of upcoming US product launches expected to offset competition and drive future growth, including biosimilars and 505(b)(2)s.

Asked by Neha Manpuria

Capital allocation priorities given increased cash balance Direct
We of course would like the right opportunity so we can deploy the capital effectively, but remain very focused in really allocating material portion of our capital to assets either on the specialty side of the business for the Developed Markets like this VISUfarma acquisition, or assets that can complement us in India both in our existing therapy areas as well as bolster the therapy areas that we want to build.

Outlines the strategic focus for M&A and investments, emphasizing specialty and India growth, indicating a disciplined approach to capital deployment.

Asked by Neha Manpuria

VISUfarma acquisition rationale, growth potential, and integration Direct
So, there are multiple areas where strategically the VISUfarma acquisition adds to us. Number one, geographically, it expands our presence from UK, Germany, France to Italy and Spain markets where we had no presence in. And just leveraging the presence across the ophthalmology portfolio, taking our respiratory products, our biosimilars, NaMuscla® into this market is a real opportunity for us that we see as a potential of growing our overall footprint in Europe.

Details the strategic rationale and expected benefits of the VISUfarma acquisition, including geographic expansion and portfolio leverage in specialty segments.

Asked by Damayanti Kerai

Impact of inflationary pressures (freight, raw material) on P&L Partial
Clearly that is impacting everybody these are dark clouds on the horizon. When it comes to freight for example, ocean freighting is about 15% higher, air freight is about 60% higher. There are of course issues in terms of raw material costs availability of chemicals sometimes, low solvent prices and all of that. We've estimated that. So clearly, we are monitoring it on a very granular basis and take appropriate action in terms of possible price increases as and when we think it is absolutely something that needs to be done.

Acknowledges significant inflationary pressures and their impact on costs, but defers quantification, stating it's factored into the overall margin guidance.

Asked by Saion Mukherjee

Semaglutide launch performance and market positioning in India Direct
I think it's been a pretty solid launch. Pretty much as good as expected or even better. We always expected to be a strong player given our cardio - metabolic play. The product from Zydus is a unique pen and I think that's differentiation in the market as well. Our patient support program is pretty solid as well. So, a so good start. I think we're the number two company as a generic one, the number three as a product itself.

Provides early insights into the strong performance and competitive positioning of a key new product launch in the Indian market.

Asked by Shyam Srinivasan

Risperdal Consta® performance and future long-acting injectables Direct
The product has done well so far. Actually, we've not been able to keep up with the demand. We manufactured the product as a CMO and have struggled to really ramp up. The brand has had supply issues as well. So, there has been an increased demand in the marketplace which is a nice problem to have and we're trying to see how we can best meet the incremental demand.

Highlights strong demand for a complex injectable product, indicating supply constraints and future growth potential from this platform, as well as strategic interest in other long-acting injectables.

Asked by Vishal Manchanda

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Detailed narrative

Strong Financial Performance in Q4 and FY26

Lupin reported its 15th consecutive quarter of year-over-year growth, with Q4 FY26 total revenue from operations reaching INR 7,475 crores, a 32% YoY increase. Full-year FY26 revenue stood at INR 27,958 crores, up 23% YoY. EBITDA for Q4 FY26 was INR 2,171 crores, growing 68% YoY, and the full-year EBITDA reached INR 8,160 crores, a 55% YoY increase, with margins expanding by 590 basis points to 29.7%, surpassing the guidance of 27-28%.

Robust US Business Growth Driven by New Products

The US business was a standout, achieving USD 1.3 billion in sales for FY26, an impressive 40% YoY growth. This was primarily driven by new product launches such as Tolvaptan, Mirabegron, and complex injectables like Risperdal Consta® with CGT Exclusivity. The company plans to launch over 50 products in the US over the next three years, including 10 exclusive first-to-files, 4 biosimilars, and 2-3 505(b)(2)s, aiming to sustain its billion-dollar-plus revenue in FY27 despite anticipated competition.

India Business Outperforms IPM with Strategic Focus

India's business grew 11.5% YoY in Q4 FY26, with the core prescription segment expanding 14.5%, outperforming the Indian Pharmaceutical Market (IPM) growth by 1.3 times. For the full year, prescription growth was 10.6% against IPM's 9.9%. The chronic segment now constitutes 66% of the portfolio, with a target to reach 70% in the next five years, supported by strong performance in respiratory and cardiac segments.

Expansion in Emerging and Other Developed Markets

Emerging Markets delivered an impressive 49% YoY growth in Q4 FY26, led by Brazil, South Africa, and the Philippines, with Brazil growing 113% YoY in local currency due to Dapagliflozin. Other Developed Markets (Europe, Canada, Australia) grew 13.3% YoY in FY26, with European sales exceeding USD 200 million. The acquisition of VISUfarma is expected to further boost presence in Europe and specialty ophthalmology, with a target to cross USD 100 million in top-line contribution within 2-3 years.

Strategic R&D and Pipeline Development

R&D spend for FY26 was 7.5% of sales, with a continued focus on complex and specialty platforms, and is expected to be around 8% in FY27. The pipeline includes over 50 active products, with near-term emphasis on respiratory, complex injectables, and biosimilars. The company also highlighted a strong 505(b)(2) pipeline, with product launches anticipated in the next two years, and is strengthening its India Innovation portfolio through both in-house development and in-licensing.

EBITDA Margin Outlook and Cost Headwinds

While full-year EBITDA margin was 29.7%, Q4 saw a sequential decline attributed to increased manpower costs, a settlement payment to Astellas for Mirabegron, and foreign exchange impacts. The company has guided for an FY27 EBITDA margin of around 25%, factoring in anticipated competition for Tolvaptan and Mirabegron, as well as increased R&D expenditure. Inflationary pressures, including 15% higher ocean freight and 60% higher air freight, are also being managed and factored into the guidance.

Improved Net Cash Position and Capital Allocation Strategy

Lupin's net cash position significantly improved to INR 4,636 crores as of March 31, 2026, compared to INR 310 crores last year. The company emphasized a focus on strategic capital allocation towards specialty assets in Developed Markets, such as the VISUfarma acquisition, and assets that complement or bolster therapy areas in India. This approach aims to deploy capital effectively for long-term growth and mission fulfillment.

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