Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2019 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Lupin: Modest growth and reduced margins - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Lupin: Modest growth and reduced margins

May 13, 2011

Lupin has announced its 4QFY11 results. The company has reported 17.0% YoY and 3.0% YoY growth in sales and net profits respectively. Here is our analysis of the results.

Performance summary
  • Sales grow by 17.0% YoY to Rs 15,536 m during 4QFY11 led by the growth in emerging market sales including India.
  • Operating margins contract by 2% (as a % of sales) to 20.0% during 4QFY11 due to the increase in raw material prices and employee costs.
  • Porfit after tax grow by mere 3.0% YoY led by decrease in the operating margins and fall in other income
  • Board recommends a 150% dividend of Rs 3 per share for the year (dividend yield of 0.7%).

    Financial performance: A snapshot
    (Rs m) 4QFY10 4QFY11 Change FY10 FY11 Change
    Net sales 13,282 15,536 17.0% 48,708 58,320 19.7%
    Expenditure 10,358 12,428 20.0% 38,869 46,410 19.4%
    Operating profit (EBDITA) 2,924 3,108 6.3% 9,839 11,911 21.1%
    EBDITA margin (%) 22.0% 20.0%   20.2% 20.4%  
    Other income 105 32.8 -68.8% 142 89 -37.3%
    Interest (net) 77.9 78 0.1% 384.9 324.6 -15.7%
    Depreciation 407.8 462.9 13.5% 1,239 1,712 38.1%
    Profit before tax 2,543 2,600 2.2% 8,357 9,963 19.2%
    Tax 293 312 6.5% 1,360 1,169 -14.0%
    Minority interest 45 16   180 168  
    Profit after tax/(loss) 2,206 2,272 3.0% 6,816 8,626 26.5%
    Net profit margin (%) 16.6% 14.6%   14.0% 14.8%  
    No. of shares (m)         445.7  
    Diluted earnings per share (Rs) 5.1 5.1   19.3 15.6  
    Price to earnings ratio (x)         26.5  

    What has driven performance in FY11?
    • Lupin's sales reported a growth of 17% YoY during 4QFY10 led by strong growth across all business segments notably the Emerging markets and the US. In the US market especially, the branded generics business grew by 50% making the total contribution from the US markets at 35% of the sales in FY11. This was driven by 50% plus increase in the sales of ‘Suprax'. On the domestic front, the company introduced products on the chronic lifestyle segment and indicated a growth of 20% growth over the next 3 years.

    • Operating margins contracted by 2% (as a % of sales) to 20% on account of higher raw material cost and employee cost. The raw material cost increased by 2.8% (as a % of sales) to 39.6% with regards to upward pressure on the chemical solvents. As is the industry wide phenomena, the employee cost also increased. R&D expenses are also higher and stands at 9.5% of total full year sales.

    • Profit after tax grew by mere 3.0% YoY because of fall in other income and increase in depreciation. The depreciation expense increased by 13% plus hinting capacity expansion that will assist the company for future growth.

To Read the Full Story, Subscribe or Sign In
To Read the Full Story, Subscribe or Sign In

Get the Indian Stock Market's
Most Profitable Ideas

How To Beat Sensex Guide 2019
Get our special report, How to Beat Sensex Nearly 3X Now!
We will never sell or rent your email id.
Please read our Terms


Mar 22, 2019 (Close)