Earnings call transcript: Lupin beats q2 2027 estimates, but margins soften

Lupin Limited exceeded expectations for its fiscal second-quarter results, reporting earnings per share of 25.14, surpassing the forecasted 24.83, and revenue of 78.27 billion rupees, surpassing the projected 77.13 billion rupees. Despite the earnings beat, the stock remained relatively unchanged in early trading, falling 0.36% to $2,008.6, indicating that investors were cautious about weaker profitability trends and a more competitive market landscape.

Revenue grew by 11% year-over-year, primarily driven by strong performance in India and other developed markets.

However, Lupin faced challenges in its U.S. business, particularly concerning products such as tolvaptan and mirabegron. The company's EBITDA margin declined sharply from the previous year due to increased competition and higher investment costs. While gross margins improved slightly to 74.2% from 73.3%, the EBITDA margin dropped from 31.3% to 25.1%.

Lupin's management maintained its full-year guidance unchanged, citing steady growth across various geographies including India, Europe, and other developed markets. Despite the margin pressure, the company's stock is trading at a relatively low P/E ratio of 12.8, which may appeal to value-oriented investors due to its growth trajectory and strong return on equity of 16.6% over the past year.