Summary
Lupin Limited - Q3 FY2026 Earnings Call Summary Friday, February 13, 2026, 5:00 PM IST
Event Participants
Executives 4 Nilesh Gupta (MD), Ramesh Swaminathan (ED, Global CFO & Head of IT and API+), Ravi Agrawal (M&A and IR), Vinita Gupta (CEO)
Analysts 8 Bansi Desai, Bino Pathiparampil, Kunal Dhamesha, Kunal Randeria, Neha Manpuria, Nikhil Mathur, Shashank Krishnakumar, Shyam Srinivasan, Tushar Manudhane, Vivek Agrawal
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹7,168 crores | +24% YoY; highest ever quarterly revenue driven by US new launches and broad-based global growth. |
| US Sales | $350 million | +46% YoY; driven by Tolvaptan exclusivity and launch of Risperdal Consta®; highest ever US revenue. |
| India Sales | ₹1,800+ crores* | +5.6% YoY; core prescription business grew +10.9%, offset by lower institutional tender sales. |
| EBITDA (ex-Forex/Other) | ₹2,210 crores | +62% YoY; substantial margin expansion due to better product mix and cost efficiencies. |
| EBITDA Margin | 31.1% | +681 bps YoY; benefited from high-margin US launches and lower share of in-licensed products in India. |
| Gross Margin | 73.5% | +420 bps YoY; driven by mix improvement and manufacturing efficiencies. |
| R&D Investment | ₹535 crores | 7.5% of sales; focused on complex generics, biosimilars, and specialty platforms. |
| Net Cash | ₹2,879 crores | Significant increase from ₹310 crores in March 2025 due to strong internal accruals. |
*Derived from consolidated growth percentages.
Geographic & Segment Commentary
- US: Recorded record sales of $350M, driven by Tolvaptan (35% market share) and the launch of Risperdal Consta® (Nanomi platform). Management cited low single-digit price erosion in the base business, offset by volume gains and seasonal products like Albuterol and Tiotropium.
- India: Core prescription business grew 10.9% YoY, outperforming the IPM in Chronic segments (Cardiac at 1.3x and Respiratory at 1.6x market growth). Chronic products now represent 67% of the India portfolio; the company launched two new divisions, including one dedicated to Obesity/GLP-1s.
- Emerging Markets: Delivered 42% YoY growth, headlined by Brazil which grew 99% in local currency following the launch of Dapagliflozin. Growth was also robust in Mexico and the Philippines, while South Africa remained tempered.
- Other Developed Markets: Europe, Canada, and Australia grew 11% YoY, contributing 11% of total sales. Contribution is expected to rise following the impending closure of the VISUfarma acquisition.
Company-Specific & Strategic Commentary
- Biosimilars: Received first US FDA approval for Pegfilgrastim; launch expected in Q4 FY26 via partner Valorum. Pipeline includes Ranibizumab (FY27), On-body Pegfilgrastim, and Aflibercept/Etanercept (FY30).
- Mirabegron Settlement: Secured a licensing deal with Astellas allowing market presence through September 2027. The deal involves a $90M total payout ($15M past damages, $75M future license fees) plus per-unit royalties.
- GLP-1/Obesity Strategy: Established a 200-member division for the “day one” launch of injectable Semaglutide in India. Strategic partnership with Gan & Lee for Bofanglutide (fortnightly GLP-1) further strengthens the metabolic pipeline.
- Digitization/AI: Implementing AI across sales, manufacturing, and quality control; pilot projects are expected to scale over the next 9-12 months to drive operational efficiency.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Margin | 27% - 28% (Full Year FY26) | Upgraded from previous 25%-26% guidance due to strong Q3 performance. |
| EBITDA Margin | 24% - 25% (FY27) | Management expects margins to “temper” due to increased R&D and competition in key products. |
| R&D Spend | 7.5% - 8.5% of Sales | Continued investment in 505(b)(2) assets, complex injectables, and respiratory trials. |
| India Growth | 1.2x - 1.3x IPM Growth | Expected to maintain double-digit growth driven by Chronic therapies and 80+ planned launches. |
| Effective Tax Rate | 21% - 22% (FY26) | Normalized tax rate based on geographic profit mix. |
Risks & Constraints
| Risk | Context |
|---|---|
| Product Concentration | High reliance on Tolvaptan and Mirabegron for US margins; generic competition for Tolvaptan is expected to be “staggered” but inevitable. |
| Regulatory/Compliance | Maintaining NAI/EIR status across global plants is critical; Nagpur and Aurangabad currently have clean EIRs. |
| R&D Execution | High absolute spend on complex drug-device combinations (Nexplanon®) and Phase III trials carries clinical and timing risks. |
Q&A Highlights
US Growth Post-Exclusivity
- Question: What drives the US business once Tolvaptan and Mirabegron taper off? (Nikhil Mathur)
- Answer: Growth will shift to the Institutional business and 505(b)(2) injectables. Biosimilars like Ranibizumab and Aflibercept, plus filing of complex assets like Iron Sucrose and Dalbavancin, are key (Vinita Gupta).
Mirabegron Financial Impact
- Question: Why is only $15M of the $90M settlement provisioned? (Bino Pathiparampil)
- Answer: $15M covers past periods; $75M is a future license fee to be amortized through September 2027. It will impact profit but the product remains “very attractive” (Ramesh Swaminathan).
India/GLP-1 Opportunity
- Question: What is the size of the Semaglutide opportunity in India? (Kunal Dhamesha)
- Answer: Internal modeling suggests a ₹1,500 crore total market in Year 1. Lupin aims for ₹50-60 crores in the first year, focusing on responsible medical engagement (Nilesh Gupta).
M&A Strategy
- Question: What is the priority for the $2.8k crore cash pile? (Vivek Agrawal)
- Answer: Priority is specialty assets in the US/Europe (Respiratory, Neurology, Ophthalmology) and India brands. Sweet spot for acquisitions is $250M-$300M (Ramesh Swaminathan/Vinita Gupta).
Key Takeaway
Lupin delivered a record-breaking Q3 FY26, characterized by a 24% YoY revenue jump to ₹7,168 crores and EBITDA margins hitting 31.1%. Performance was bolstered by US exclusivity for Tolvaptan and the Mirabegron settlement, which provides revenue certainty through late 2027. Strategically, the company is pivoting toward complex platforms, with R&D at 7.5% of sales and a maiden US biosimilar approval (Pegfilgrastim) marking a shift into the institutional segment. In India, the company continues to outpace the market in Chronic therapies and is aggressively positioning for the GLP-1/Obesity wave with a new dedicated salesforce. While management guided for a slight margin moderation to 24-25% in FY27 due to R&D scaling and competitive entries, the robust net cash position of ₹2,879 crores provides significant headroom for specialty M&A. Investors should watch for the execution of the Pegfilgrastim launch and the integration of the VISUfarma acquisition in Europe.
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