Speaking to CNBC-TV18, Mayuresh Joshi of Angel Broking expressed surprise that the company’s earnings were better than what the brokerage’s expectations were on operating performance and EBIDTA margins.
He said the company’s plan of action for its Goa plant, which has been entangled in regulatory hurdles with the US FDA, will be crucial. “The timelines that Lupin’s management is looking at for the Goa plant will be critical,” he said, adding even though the pharma company has a huge pipeline in generics,” the commentary surrounding its Goa plant will be extremely critical for Lupin.”
Bhavesh Gandhi of IIFL said Lupin’s topline and profit numbers for the quarter were above estimates. He said the company will likely sustain its domestic growth, but the brokerage would wait for Lupin’s outlook for FY17.
Below is the verbatim transcript of Bhavesh Gandhi & Mayuresh Joshi’s interview with Surabhi Upadhyay and Ekta Batra on CNBC-TV18.
Ekta: Lupin’s numbers seem better than expectations?
Joshi: Yes, numbers are better than what we were expecting in terms of operating performance even EBITDA margins surprised. It will be more an effect on the launches that they have done. So yes, numbers are better than expected.
Ekta: Your thoughts on the fact that the upside for the stock would be capped till we get more clarity on Goa. So despite such a good set of numbers, we are not going to see the stock recover to the levels that we saw pre the Goa observations.
Joshi: Yes, that is going to be extremely critical as to what the management has to say about Goa, the kind of a fine lines they are looking at in terms of the remediation and what kind of approval they are looking at coming out of Goa plant as well. So generic pipeline is quite strong for Lupin at this point of time at least at the end of Q3, their cumulative filing stood in excess of 220 odd out of which 124 got approved. So, they have a huge pipeline in terms of generic order size but the commentary related to Goa plant is going to be extremely critical for Lupin.
Ekta: What have you read through in terms of numbers and would you be changing your estimates?
Gandhi: The topline and profit numbers are above estimate. We had expected topline under Rs 4,000 crore odd and an absolute profit after tax (PAT) over Rs 700 crore odd. So both the numbers are above estimate. However, we would await final details and the management commentary before revising our estimate.
Ekta: What is it from the management that you would be waiting to hear in terms of commentary?
Gandhi: In terms of commentary, we would like to get a hang on how Glumetza and the US portfolio has performed and what is the outlook on those and a sense on the new launches that are likely in the next 12-18 months.
Ekta: Your thoughts with regards to India growth rates and how much do you think Glumetza and Fortamet might have contributed, going by what they have reported?
Gandhi: The domestic growth is likely to sustain and if you look on annualised basis, anywhere between 14-15 percent growth is what we would like to expect going ahead. However, Glumetza and Fortamet both would have contributed hefty chunk to the Q4 performance.