India 
USA
UK
South Africa
Australia
Philippines
Germany
Netherlands
Mexico
Brazil
Mumbai, February 3, 2022: Pharma major Lupin Limited [BSE: 500257 | NSE: LUPIN] reported its financial performance for the quarter ending December 31, 2021. These unaudited results were taken on record by the Board of Directors at a meeting held today.
Financial Highlights – Consolidated IND-AS
Amt in INR mn
| Particulars | Quarter | ||||
|---|---|---|---|---|---|
| Q3 FY2022 | Q2 FY2022 | QoQ Growth % | Q3 FY2021 | YoY Growth % | |
| Sales | 40,875 | 40,034 | ↑ 2.1% | 39,173 | ↑ 4.3% |
| EBITDA | 4,039* | 6,285 | ↓ 35.7% | 7,998 | ↓ 49.5% |
| EBITDA Margin (%) | 9.9% | 15.7% | ↓ 580 bps | 20.4% | ↓ 1050 bps |
| PBT | 1,671* | 3,825** | ↓ 56.3% | 5,247 | ↓ 68.2% |
* Excluding one-time expenses of INR 1932 mn Q3 FY22 EBIDTA was INR 5971 mn and PBT was INR 3603 mn
** Adjusted for Impairment & Business Compensation Expenses in Q2 FY2022
Income Statement highlights – Q3 FY2022
- Gross Profit was INR 23,929 mn compared to INR 23,769 mn in Q2 FY2022, with margin of 58.5%
- Personnel cost was 18.2% of sales at INR 7,438 mn compared to INR 7,586 mn in Q2 FY2022
- Manufacturing and other expenses were 33.1% of sales at INR 13,518 mn compared to INR 11,425 mn in Q2 FY2022
- The financial results include one-time expenses2 of INR 1932 mn, excluding which the EBIDTA (before Fx and Other income) was 13.7% of sales
- Investment in R&D for the quarter was INR 3,546 mn (8.7% of sales)
Balance Sheet highlights
- Operating working capital was INR 65,680 mn as on December 31, 2021
- Capital Expenditure for the quarter was INR 2,787 mn and INR 5,295 mn for 9M FY2022
- Net Debt as on December 31, 2021 stands at INR 22,448 mn
- Net Debt-Equity for the company as on December 31, 2021 stands at 0.18
Commenting on the results, Mr. Nilesh Gupta, Managing Director, Lupin Limited said, “We are on the path of sustained growth across markets. Our inhalation portfolio continues to build share in the U.S. and helped register double-digit growth sequentially, despite pricing and demand challenges on seasonal products. The inflationary environment has impacted margins, but we remain focussed on margin and EBIDTA improvement as we deliver on key product launches, cost optimization and improving efficiencies, especially by H2 FY23”
Consolidated Financial Results Q3 FY2022
Amt in INR mn
| Particulars | Q3 FY2022 | % of sales | Q2 FY2022 | % of sales | QoQ Gr% | Q3 FY2021 | % of sales | YoY Gr% |
| Sales | 40,875 | 100.0% | 40,034 | 100.0% | 2.1% | 39,173 | 100.0% | 4.3% |
| Other operating income | 734 | 1.8% | 879 | 2.2% | -16.5% | 1,001 | 2.6% | -26.7% |
| Total Revenue from operations | 41,609 | 101.8% | 40,913 | 102.2% | 1.7% | 40,174 | 102.6% | 3.6% |
| Material cost | 16,946 | 41.5% | 16,265 | 40.6% | 4.2% | 13,750 | 35.1% | 23.2% |
| Gross Profit (Excl. Other op. income)1 | 23,929 | 58.5% | 23,769 | 59.4% | 0.7% | 25,423 | 64.9% | -5.9% |
| Employee cost | 7,438 | 18.2% | 7,586 | 18.9% | -2.0% | 7,068 | 18.0% | 5.2% |
| Manufacturing & Other expenses1/2 | 13,518 | 33.1% | 11,425 | 28.5% | 18.3% | 11,287 | 28.8% | 19.8% |
| Other Income | 341 | 0.8% | 728 | 1.8% | -53.2% | 212 | 0.5% | 60.8% |
| Forex Loss / (Gain) | 9 | 0.0% | 80 | 0.2% | -88.8% | 282 | 0.7% | -96.8% |
| EBITDA2 | 4,039 | 9.9% | 6,285 | 15.7% | -35.7% | 7,999 | 20.4% | -49.5% |
| Depreciation, Amortization & Impairment Expense | 2,034 | 5.0% | 2,116 | 5.3% | -3.9% | 2,443 | 6.2% | -16.7% |
| EBIT | 2,005 | 4.9% | 4,169 | 10.4% | -51.9% | 5,556 | 14.2% | -63.9% |
| Finance cost | 334 | 0.8% | 344 | 0.9% | -2.9% | 309 | 0.8% | 8.1% |
| Adjusted Profit Before Tax (PBT) | 1,671 | 4.1% | 3,825 | 9.6% | -56.3% | 5,247 | 13.4% | -68.2% |
| Business Compensation Expense3 | – | 0.0% | 18,796 | 47.0% | – | 0.0% | ||
| Impairment Expense4 | – | 0.0% | 7,077 | 17.7% | – | 0.0% | ||
| Profit Before Tax (PBT)2 | 1,671 | 4.1% | (22,048) | -55.1% | 5,247 | 13.4% | ||
| Tax5 | (3,820) | -9.3% | (1,099) | -2.7% | 835 | 2.1% | ||
| Profit After Tax (PAT) | 5,491 | 13.4% | (20,949) | -52.3% | 4,412 | 11.3% | ||
| (+) Share of Profit from JV | 0 | 0.0% | 0 | 0.0% | 2 | 0.0% | ||
| (-) Non-Controlling Interest | 36 | 0.1% | 31 | 0.1% | 31 | 0.1% | ||
| Profit/(Loss) for the period | 5,455 | 13.3% | (20,980) | -52.4% | 4,383 | 11.2% | ||
- Royalty/Profit Share Expenses on certain in-licensed/partnered products have been reclassified to Material Costs from Manufacturing and Other expenses starting Q1 FY2022. On a comparable basis, the Gross Margin adjusted for such change would be 63.6% of sales in Q3 FY2021. Manufacturing & Other Expenses adjusted for this change related to Royalty/Profit Share Expenses would be 27.5% of sales in Q3 FY2021.
- Other expenses include the impact of one-time expenses of INR 1932 mn related to residual Metformin returns from retail and consumers not identified previously, and a provision for aged stock returns of Oseltamivir given lack of an active flu season for the past two years.
- In Q2 FY2022 we had created provision of INR 18,796 mn [including INR 387 mn towards litigation and settlement related expenses] under Glumetza class actions. The amounts due to the two plantiffs group was settled in Q3.
- Q2 FY2022 includes impairment Expense of INR 7,077 mn for impairment of Solosec® IP.
- The current tax is computed basis the concept of likely Effective Tax Rate for the year. The one-time items in Q2 create an impact on the overall profitability for first 9M, which is negative. Hence basis average ETR concept as per standards, we see a credit in tax line.
Consolidated Financial Results 9M FY2022
Amt in INR mn
| Particulars | 9M FY2022 | % of sales | 9M FY2021 | % of sales | YoY Gr% |
| Sales | 123,283 | 100.0% | 111,677 | 100.0% | 10.4% |
| Other operating income | 1,942 | 1.6% | 2,125 | 1.9% | -8.6% |
| Total Revenue from operations | 125,225 | 101.6% | 113,802 | 101.9% | 10.0% |
| Material cost | 48,490 | 39.3% | 40,446 | 36.2% | 19.9% |
| Gross Profit (Excl. Other op. income)1 | 74,793 | 60.7% | 71,231 | 63.8% | 5.0% |
| Employee cost | 22,862 | 18.5% | 21,857 | 19.6% | 4.6% |
| Manufacturing & Other expenses1/2 | 35,174 | 28.5% | 32,010 | 28.7% | 9.9% |
| Other Income | 1,269 | 1.0% | 890 | 0.8% | 42.6% |
| Forex Loss / (Gain) | (282) | -0.2% | 1,005 | 0.9% | -128.1% |
| EBITDA | 20,250 | 16.4% | 19,374 | 17.3% | 4.5% |
| Depreciation, Amortization & Impairment Expense | 6,238 | 5.1% | 6,717 | 6.0% | -7.1% |
| EBIT | 14,012 | 11.4% | 12,657 | 11.3% | 10.7% |
| Finance cost | 1,013 | 0.8% | 1,088 | 1.0% | -6.9% |
| Adjusted Profit Before Tax (PBT) | 12,999 | 10.5% | 11,569 | 10.4% | 12.4% |
| Business Compensation Expense3 | 18,796 | 15.2% | – | 0.0% | |
| Impairment Expense4 | 7,077 | 5.7% | – | 0.0% | |
| Profit Before Tax (PBT) | (12,874) | -10.4% | 11,569 | 10.4% | |
| Tax5 | (2,896) | -2.3% | 3,945 | 3.5% | |
| Profit After Tax (PAT) | (9,978) | -8.1% | 7,624 | 6.8% | |
| (+) Share of Profit from JV | 2 | 0.0% | 12 | 0.0% | |
| (-) Non-Controlling Interest | 125 | 0.1% | 74 | 0.1% | |
| Profit/(Loss) for the period | (10,101) | -8.2% | 7,562 | 6.8% | |
- Royalty/Profit Share Expenses on certain in-licensed/partnered products have been reclassified to Material Costs from Manufacturing and Other expenses starting Q1 FY2022. On a comparable basis, the Gross Margin adjusted for such change would be 63% of sales in 9M FY2021. Manufacturing & Other Expenses adjusted for this change related to Royalty/Profit Share Expenses would be 27.9% of sales in 9M FY2021.
- Other expenses include the impact of one-time expenses of INR 1932 mn related to residual Metformin returns from retail and consumers not identified previously, and a provision for aged stock returns of Oseltamivir given lack of an active flu season for the past two years.
- In Q2 FY2022 we had created provision of INR 18,796 mn [including INR 387 mn towards litigation and settlement related expenses] under Glumetza class actions. The amounts due to the two plantiffs group was settled in Q3.
- Q2 FY2022 includes impairment Expense of INR 7,077 mn for impairment of Solosec® IP.
- The current tax is computed basis the concept of likely Effective Tax Rate for the year. The one-time items in Q2 create an impact on the overall profitability for first 9M, which is negative. Hence basis average ETR concept as per standards, we see a credit in tax line.
Sales Mix
Amt in INR mn
| Particulars | Q3 FY22 | Q2 FY22 | Growth QoQ | Q3 FY21 | Growth YoY |
| North America | 15,775 | 14,291 | 10.4% | 14,424 | 9.4% |
| India | 14,733 | 15,435 | -4.5% | 13,669 | 7.8% |
| Growth Markets | 3,390 | 3,490 | -2.9% | 3,314 | 2.3% |
| EMEA | 3,422 | 3,484 | -1.8% | 3,272 | 4.6% |
| ROW | 991 | 656 | 51.0% | 1,056 | -6.1% |
| Total Formulations | 38,311 | 37,356 | 2.6% | 35,735 | 7.2% |
| API | 2,564 | 2,678 | -4.3% | 3,438 | -25.4% |
| Consolidated Sales | 40,875 | 40,034 | 2.1% | 39,173 | 4.3% |
Operational Highlights
North America
North America sales for Q3 FY2022 were INR 15,775 mn, up 10.4% compared to INR 14,291 mn in Q2 FY2022, up 9.4% as compared to INR 14,424 mn in Q3 FY2021; accounting for 39% of Lupin’s global sales.
Q3 FY2022 sales were USD 202 mn compared to USD 184 mn in Q2 FY2022 and USD 188 mn in Q3 FY2021.
The Company filed 3 ANDAs in the quarter, received 3 ANDA approvals from the U.S. FDA, and launched 2 products in the quarter in the U.S. market. The Company now has 167 products in the U.S. generics market.
Lupin continues to be the 3rd largest pharmaceutical player in both U.S. generic market and U.S. total market by prescriptions (IQVIA MAT November 2021). Lupin is the market leader in 58 products in the U.S. generics market and amongst the Top 3 in 119 of its marketed products (IQVIA September 2021).
India
India formulation sales for Q3 FY2022 were INR 14,733 mn, down 4.5% as compared to INR 15,435 mn in Q2 FY2022, up 7.8% as compared to INR 13,669 mn in Q3 FY2021; accounting for 36% of Lupin’s global sales.
India Region Formulations sales grew by 11.9% in the quarter as compared to Q3 FY2021. The company launched 1 brand in the Respiratory segment and 2 brands in the Cardiac segment in the quarter.
Lupin is the 6th largest company in the Indian Pharmaceutical Market (IQVIA MAT December 2021).
Growth Markets (LATAM and APAC)
Growth Markets registered sales of INR 3,390 mn for Q3 FY2022, down 2.9% compared to INR 3,490 mn in Q2 FY2022, up 2.3% as compared to INR 3,314 mn in Q3 FY2021; accounting for 8% of Lupin’s global sales.
Brazil sales were BRL 49 mn for Q3 FY2022 compared to BRL 48 mn for Q2 FY2022 and BRL 66 mn for Q3 FY2021.
Mexico sales were MXN 195 mn for Q3 FY2022 compared to MXN 172 mn for Q2 FY2022 and MXN 188 mn for Q3 FY2021.
Philippines sales were PHP 401 mn for Q3 FY2022 compared to PHP 643 mn for Q2 FY2022 and PHP 367 mn for Q3 FY2021.
Australia sales were AUD 17.8 mn for Q3 FY2022 compared to AUD 18.3 mn for Q2 FY2022 and AUD 15.7 mn for Q3 FY2021.
Europe, Middle-East and Africa (EMEA)
EMEA sales for Q3 FY2022 were INR 3,422 mn, down 1.8% compared to INR 3,484 mn in Q2 FY2022, up 4.6% compared to INR 3,272 mn in Q23 FY2021; accounting for 8% of Lupin’s global sales.
South Africa sales for Q3 FY2022 were ZAR 319 mn, compared to ZAR 357 mn in Q2 FY2022 and ZAR 323 mn in Q3 FY2021. Lupin is the 6th largest player in South Africa in the total generics market (IQVIA November 2021).
Germany sales for Q3 FY2022 were EUR 8.8 mn, compared to EUR 7.9 mn in Q2 FY2022 and EUR 8.1 mn in Q3 FY2021.
Global API
Global API sales for Q3 FY2022 were INR 2,564 mn, down 4.3% compared to INR 2,678 mn in Q2 FY2022, down 25.4% as compared to INR 3,438 mn in Q3 FY2021; accounting for 6% of Lupin’s global sales.
Research and Development
Investment in R&D amounted to INR 3,546 mn (8.7% of sales) for Q3 FY2022 as compared to INR 3,300 mn (8.2% of sales) for Q2 FY2022.
Lupin received approval for 3 ANDAs from the U.S. FDA in the quarter. Cumulative ANDA filings with the U.S. FDA stand at 447 as of December 31, 2021, with the company having received 295 approvals to date.
The Company now has 50 First-to-File (FTF) filings including 20 exclusive FTF opportunities. Cumulative U.S. DMF filings stand at 196 as of December 31, 2021.
About Lupin
Lupin is an innovation-led transnational pharmaceutical company headquartered in Mumbai, India. The Company develops and commercializes a wide range of branded and generic formulations, biotechnology products and APIs in over 100 markets in the U.S., India, South Africa and across Asia Pacific (APAC), Latin America (LATAM), Europe and Middle-East regions.
The Company enjoys leadership position in the cardiovascular, anti-diabetic, and respiratory segments and has significant presence in the anti-infective, gastro-intestinal (GI), central nervous system (CNS) and women’s health areas. Lupin is the third largest pharmaceutical company in the U.S. by prescriptions. The company invested 9.6% of its revenue on research and development in FY21.
Lupin has 15 manufacturing sites, 7 research centres, more than 20,000 professionals working globally, and has been consistently recognized as a ‘Great Place to Work’ in the Biotechnology & Pharmaceuticals sector.
Please visit www.lupin.com for more information.
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For further information or queries please contact –
Shweta Munjal
Vice President & Global Head – Corporate Communications
Email: shwetamunjal@lupin.com