One of the country's biggest pharma companies, Lupin has a very strong portfolio of Abbreviated New Drug Application (ANDA) filings in the US. In a bid to differentiate itself from its peers Lupin sought to develop its own brands there -- a complex affair given the highly competitive and strictly regulated nature of the US market.
Why you should add Lupin to your portfolio?
Lupin's pipeline of products slated for the US market is an enviable lot. The 125 ANDAs that it has filed is one of the highest in the industry after market leader Sun Pharma. Lupin has received approvals for 116 products with an addressable market size of $80 billion that are still to be launched. It also has 29 first-to-file products that address a market of $15 billion. US accounts for 42 per cent of its topline. With the expected launches from recent approvals and its oral contraceptive portfolio gaining strength, Lupin is expected to do well in the second half of this year.
Lupin's domestic sales declined 5 per cent in the first quarter of this year mainly on account of implementation of the drug pricing policy and the discontinuance of two of its branded products. The impact of drug pricing is expected to be limited for Lupin -- at around 1.3 per cent of FY13 sales. According to Kotak Securities, domestic sales should grow at 8 per cent this year and at around 18 per cent next year.
Lupin's Japan subsidiary, Irom, saw revenues decline 11 per cent (y-o-y) in Q1 on account of a fall in contract manufacturing business. Thankfully, this situation is expected to turn around by the third quarter of this year.
Ebitda margins jumped to 23.8 per cent in Q1 compared to 20 per cent margins seen a year ago. PAT was up 43 per cent boosted by forex gain of Rs 70 crore. Lupin is not a one-quarter play. To gain from the company's wealth of ANDA filings, latch on to Lupin with at least a three-year time horizon, if not more.