Drug-maker Lupin Ltd expects its India business, which saw a 9 per cent growth in the quarter ended September 30, to see an 18 per cent growth rate by the end of this year, even as its US operation readies for a dozen more product launches in the next six months.
Revenue from the India operations has taken off. The domestic business would revert to 18 percent growth by the end of this year, Nilesh Gupta, Managing Director, told Business Line , after chairing his first board meeting since assuming the top-job early last month.
In the April-June quarter, Lupin’s domestic business had seen a contraction of 5 per cent.
Among the several issues that hit domestic revenue in the last quarter were the Government’s move to cut prices of all medicines in the National List of Essential Medicines, the confusion over how to apply the 45-day period given to drug-makers to sell medicines with the revised prices, and a margin tussle with traders, he said.
While the trade stand-off has not yet been resolved, Gupta said, distributors and chemists are stocking the medicines again. There was a boycott on Lupin medicines by the traders on the margins issue from October 1, he said, adding it had resulted in a shortage of some drugs.
Companies are now giving 16 per cent margin to retailers and 8 per cent to wholesalers as outlined in the Drug Price Control Order 2013.
Traders are, however, demanding 20 percent (retailers) and 10 percent (wholesalers), given to them by companies under the earlier price control regime.
Business break-up
Lupin’s India business, which contributed 25 percent of the company’s turnover during the quarter, clocked a revenue of Rs 663 crore , compared with Rs 606 crore in the corresponding period last year.
Revenue in the US market grew 32 percent to Rs 1,034 crore from Rs 781 crore in the last corresponding period. And revenue from the brands contributed 10 percent of the total US sales, whereas the generics business contributed 90 percent in the quarter.
Other sectors
In another key market, Lupin’s Japan sales from Kyowa and I’rom clocked Rs 309 crore during the quarter, contributing 12 percent of the company’s consolidated revenue.
The drug-maker’s net revenue from active pharmaceutical ingredients showed a 20 per cent growth, at Rs 286 crore.
Its research spend in the quarter stood at Rs 217 crore, up 8 per cent against Rs 93 crore or about 4 per cent of net sales a year ago.
On Wednesday, the company’s shares gained 1.46 per cent on BSE to Rs 901.90.