Shares of pharma company, Lupin fell as much as 6 per cent to hit intraday low of Rs 1,589 after the company on Wednesday said that its net profit for the March quarter declined one per cent. Lupin reported a net profit of Rs 547 crore for the March quarter compared to Rs 553 crore in the corresponding quarter of last financial year. The shares of Lupin fell consecutively for the second day as its earnings were below Street estimates. Analysts polled by NDTV had estimated its net profit at Rs 607 crore on sales of Rs 3,346 crore. Nilesh Gupta, MD of Lupin said, "The company saw higher than expected price erosion primarily driven by the customer consolidation. We have customers who have 27-28 per cent of market share and that is significant ability to negotiate prices and that led to the pricing pressure. "The product launches we had in FY14 saw more price erosion which was on expected lines which made the earnings look worse. Lack of new approvals by the FDA also took toll on the earnings," added Mr Gupta. However, the management said the price erosion is behind us and going ahead Lupin expects it will take couple of quarters for company to see meaningful approvals. Meanwhile, most of the international brokerages have maintained their positive outlook on the stock. Credit Suisse has maintained its 'neutral' stance on Lupin with a target of Rs 1585 per share. It expects FY16 EPS cut of 10 per cent. Barclays remains 'overweight' on Lupin but it has cut its target to Rs 2102 per share. Barclays says disappointing Q4 should not distract from longer term outlook. Macquarie has maintained 'outperform' with a target of Rs 2,000 per share and has cut FY16 EPS by 5 per cent to factor a muted H1. Lupin ended 3.4 per cent lower at Rs 1,632.
Shares of pharma company, Lupin fell as much as 6 per cent to hit intraday low of Rs 1,589 after the company on Wednesday said that its net profit for the March quarter declined one per cent. Lupin reported a net profit of Rs 547 crore for the March quarter compared to Rs 553 crore in the corresponding quarter of last financial year. The shares of Lupin fell consecutively for the second day as its earnings were below Street estimates. Analysts polled by NDTV had estimated its net profit at Rs 607 crore on sales of Rs 3,346 crore. Nilesh Gupta, MD of Lupin said, "The company saw higher than expected price erosion primarily driven by the customer consolidation. We have customers who have 27-28 per cent of market share and that is significant ability to negotiate prices and that led to the pricing pressure. "The product launches we had in FY14 saw more price erosion which was on expected lines which made the earnings look worse. Lack of new approvals by the FDA also took toll on the earnings," added Mr Gupta. However, the management said the price erosion is behind us and going ahead Lupin expects it will take couple of quarters for company to see meaningful approvals. Meanwhile, most of the international brokerages have maintained their positive outlook on the stock. Credit Suisse has maintained its 'neutral' stance on Lupin with a target of Rs 1585 per share. It expects FY16 EPS cut of 10 per cent. Barclays remains 'overweight' on Lupin but it has cut its target to Rs 2102 per share. Barclays says disappointing Q4 should not distract from longer term outlook. Macquarie has maintained 'outperform' with a target of Rs 2,000 per share and has cut FY16 EPS by 5 per cent to factor a muted H1. Lupin ended 3.4 per cent lower at Rs 1,632.
Shares of pharma company, Lupin fell as much as 6 per cent to hit intraday low of Rs 1,589 after the company on Wednesday said that its net profit for the March quarter declined one per cent. Lupin reported a net profit of Rs 547 crore for the March quarter compared to Rs 553 crore in the corresponding quarter of last financial year. The shares of Lupin fell consecutively for the second day as its earnings were below Street estimates. Analysts polled by NDTV had estimated its net profit at Rs 607 crore on sales of Rs 3,346 crore. Nilesh Gupta, MD of Lupin said, "The company saw higher than expected price erosion primarily driven by the customer consolidation. We have customers who have 27-28 per cent of market share and that is significant ability to negotiate prices and that led to the pricing pressure. "The product launches we had in FY14 saw more price erosion which was on expected lines which made the earnings look worse. Lack of new approvals by the FDA also took toll on the earnings," added Mr Gupta. However, the management said the price erosion is behind us and going ahead Lupin expects it will take couple of quarters for company to see meaningful approvals. Meanwhile, most of the international brokerages have maintained their positive outlook on the stock. Credit Suisse has maintained its 'neutral' stance on Lupin with a target of Rs 1585 per share. It expects FY16 EPS cut of 10 per cent. Barclays remains 'overweight' on Lupin but it has cut its target to Rs 2102 per share. Barclays says disappointing Q4 should not distract from longer term outlook. Macquarie has maintained 'outperform' with a target of Rs 2,000 per share and has cut FY16 EPS by 5 per cent to factor a muted H1. Lupin ended 3.4 per cent lower at Rs 1,632.
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