Expect 26-28% op margin growth; eye more acquisitions
Ramesh Swaminathan, CFO, Lupin
Jan 08, 2016 | Source: CNBC-TV18
• Pharmaceutical giant, Lupin expects a better performance next year in comparison to a lackluster FY16. The company was embroiled by issues with the US regulator USFDA in FY16.
• New launches, ANDA approvals as well as acquisitions will aid growth. Unprecedented price erosion and warnings from USFDA are past, and the company expects 26-28 percent improvement in margin in the coming year.
• Post its acquisition of Gavis, the company is comfortable with a debt-EBITDA ratio in range of 1.5-2. The company’s quantum of leverage on the balance sheet is good and the company could look at more acquisitions in range of USD 250-300 million. Gavis acquisition will help improve US turnover.
• The US market was impacted due to slow approvals and high price erosion is last two years. The market share of the company will be fairly high on back of Glumetza and Fortamet. Lupin received 10-12 US ANDA approvals in past nine months and is hoping to receive another 14-15 approvals by the end of 2016.
• In Japan, the yen appreciation will not have much impact on the Balance Sheet, but will be visible in the P/L account. Japan contributes 13-15 percent to total revenue of the company.
• On its India business, the company expects 18-20 percent revenue growth in the current year. However, excessive focus of government on affordability could prove negative for the sector. The company’s Goa plant, which was under the USFDA scanner, has received approvals post the form 483..
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