Lupin Shares Fall 5.54% Amid Sensex Gains

On Thursday, October 10, 2024, the shares of pharmaceutical giant Lupin Limited witnessed a sharp fall of  5.54% and closed at ₹2,157.60. This decline comes despite an overall rise in the Sensex, indicating specific concerns impacting Lupin’s stock. This fall came after the United States Food and Drug Administration (USFDA) issued 5 observations following an inspection of its biotech facility located in Pune.

The inspection was conducted between September 25 and October 4, 2024, and was part of the USFDA’s Pre-Approval Inspection process. The inspection concluded with 5 observations. The company further assured stakeholders that it is addressing these observations comprehensively and will respond to the USFDA within the required timeframe.

The news has raised concerns among investors about potential delays in product approvals, which could affect Lupin’s revenue streams in the competitive pharmaceutical landscape. Despite the current slump, it’s essential to contextualise this decline against Lupin’s recent performance. The company reported a remarkable 77.2% year-on-year increase in profit after tax (PAT) for the June quarter of the financial year 2025 (Q1FY25), reaching ₹801 crore. Additionally, its revenue from operations surged by 16.2% year-on-year, totalling ₹5,514.3 crore.

On a sequential basis, the company’s PAT exhibited impressive growth of 122.9%, while revenue increased by 12.6%. Furthermore, the Lupin share price has soared over 65% year-to-date and gained more than 87% in the past year. Despite this impressive performance, the stock has experienced a slight dip of about 2% in the last month and approximately 1.5% in the past 5 days, suggesting some volatility amidst its overall growth trajectory.

Founded in 1968 by Desh Bandhu Gupta, Lupin Limited began with a single manufacturing facility in Aurangabad and has since expanded to 11 plants across India. It now operates in over 100 global markets, including the US, South Africa, and Europe. Lupin has positioned itself as one of the largest generic pharmaceutical companies by revenue, specialising in a broad array of products, including generic and branded formulations, biotechnology products, and active pharmaceutical ingredients (APIs).

Lupin is recognised as a global leader in the Anti-TB and cephalosporins segments and makes significant contributions in areas such as cardiovascular health, diabetology, asthma, paediatrics, and central nervous system disorders. The company places a strong emphasis on research and development, with two advanced research centres in Pune and Aurangabad focusing on utilising cutting-edge technologies to innovate and develop new pharmaceutical products.

At the close of the market on Thursday, Lupin shares were trading at ₹2,157.60, marking a significant decrease from its opening price of ₹2,306.85. The stock’s 52-week high stands at ₹2,312.00, while its 52-week low is ₹1,113.00, indicating a wide fluctuation over the past year. 

While the Lupin share price reflects a momentary setback, the company’s strong fundamentals and commitment to innovation position it well for future growth. Investors will be watching closely to see how Lupin navigates these regulatory challenges and continues to leverage its global presence in the pharmaceutical industry.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.