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Oct 31 (Reuters) - Lupin Ltd, India’s second-largest drugmaker by revenue, posted a lower-than-expected second-quarter profit on Wednesday, as sales in the United States - a key market - dropped and overall manufacturing costs rose.
Net profit plunged 41.5 percent to 2.66 billion rupees for the quarter ended Sept. 30, missing average analysts’ estimate of 2.73 billion rupees, Refinitiv data showed.
Higher expenses hurt the drugmaker’s profit. Cost of raw materials surged 35 percent, while manufacturing and other costs grew nearly 12 percent.
Indian pharmaceutical companies have been battling weak sales in the United States as regulatory bans and warnings over quality control violations at production plants weigh on their profitability. Pricing pressure in the United States is also a cause for concern.
Lupin’s sales in North America, which accounts for nearly a third of total sales, dropped 8.3 percent to 12.49 billion rupees ($169.06 million). Income from operations rose marginally to 38.91 billion rupees.
“Aided by forex and markets such as the United States starting to stabilize, we are now getting back on the growth mode,” said Nilesh Gupta, managing director, Lupin Ltd.
The company’s cost optimization efforts are likely to show results from the next fiscal, he added.
Shares of the drugmaker were trading 2.9 percent higher after results were announced on a broader Mumbai market, that was up 1.8 percent, as of 0935 GMT.
$1 = 73.8200 Indian rupees Reporting by Tanvi Mehta in Bengaluru; Editing by Amrutha Gayathri and Sherry Jacob-Phillips