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Slightly better revenue/improved margin led to a beat on earnings

• Lupin's (LPC) 1QFY26 revenues grew 11.9% YoY to INR62.7b. (our est. of INR60.5b).
• The US sales grew 24.3% YoY to INR24b (up 22% YoY in CC to USD282m; 39% of sales).
• Domestic formulation (DF) sales grew 7.8% YoY to INR20.9b (34% of sales).
• Other developed market sales grew 17.4% YoY to INR7.7b (13% of sales).
• Emerging market sales grew 5.2% YoY to INR 6.5b (10% of sales).
• API sales decreased 32.9% YoY to INR2.4b (4% of sales).
• The gross margin (GM) expanded 290bp YoY to 71.7% due to better product mix and a reduction in raw material cost.
• The EBITDA margin expanded 190bp YoY to 26.2% (our est: 24.6%), largely due to better GM. The benefit was partly offset by higher R&D spending (+150bp YoY as a % of sales).
• As a result, EBITDA grew 21% YoY to INR16.4b (vs our est: INR15b).
• Adj. PAT grew 27% YoY to INR11.5b (our est: INR9.3b), further supported by a lower tax rate.
• The EBITDA/PAT beat the Bloomberg Consensus estimate by 11%/19%, while its revenue was in line with the BBG estimates.

Other highlights

• LPC received two ANDA approvals and launched three ANDAs in 1QFY26.
• The company launched five brands across therapies in the Domestic Formulation (DF) segment in 1QFY26.
• R&D was 7.9% of sales for the quarter.
• Capex for the quarter was INR2b.
• Cash surplus stood at INR12.4b at the end of Jun’25.

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