Lupin margin falls 7.10 points as costs outpace revenue growth
Operating margin also fell 3.48 percentage points sequentially, while a lower tax rate limited the net-profit decline to -18.47%.
Filed 04 Nov 2026, 00:44 IST · Lupin Ltd (LUPIN)
Key takeaways
- Consolidated revenue grew +11.06% YoY, but operating profit fell -12.68% as expenses rose +22.88%.
- Operating margin narrowed 7.10 percentage points YoY to 26.12%, its second straight quarterly decline.
- Management reported India business growth of 14.7% YoY and said it plans more than 20 product launches in FY27.
Price around the results
Revenue growth did not convert into operating profit
Consolidated revenue grew +11.06% YoY, but operating profit fell -12.68% because expenses increased +22.88%. Sequentially, revenue fell -5.43% while expenses declined only -0.76%, driving a 3.48 percentage-point margin contraction. Other income accounted for 8.03% of profit before tax, but the main pressure came from operating costs.
Depreciation added pressure below the operating line
Depreciation rose +53.39% YoY and +7.30% QoQ, while interest expense fell -1.75% YoY and -3.58% QoQ. The tax rate increased 0.84 percentage points YoY but fell 2.90 percentage points sequentially, helping net profit decline less than profit before tax in the quarter. Lupin's 26.12% operating margin was 4.48 percentage points above the 21.64% median for 57 Healthcare peers that reported the same quarter.
Margin has fallen for two consecutive quarters
Operating margin declined from 33.25% in Q4FY26 to 29.60% in Q1FY27 and 26.12% in Q2FY27. Management said India's business grew 14.7% YoY and that its chronic business grew 19.5% in H1, ahead of 17.2% IPM growth. The company said it plans to launch more than 20 products and file more than 15 ANDAs in FY27, alongside strategic expansion in the hospital channel and its Extra-Urban division, Uday.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹7,827 cr | ₹8,277 cr | -5.43% | +11.06% |
| Other income | ₹127 cr | ₹130 cr | -2.69% | +40.89% |
| Expenses | ₹5,783 cr | ₹5,827 cr | -0.76% | +22.88% |
| Operating profit | ₹2,044 cr | ₹2,450 cr | -16.54% | -12.68% |
| Operating margin (%) | 26.12% | 29.60% | — | — |
| Interest | ₹106 cr | ₹110 cr | -3.58% | -1.75% |
| Depreciation | ₹486 cr | ₹453 cr | +7.30% | +53.39% |
| Profit before tax | ₹1,580 cr | ₹2,017 cr | -21.70% | -21.29% |
| Tax | ₹424 cr | ₹600 cr | -29.33% | -18.74% |
| Net profit | ₹1,155 cr | ₹1,417 cr | -18.47% | -22.19% |
| EPS (₹) | ₹25.27 | ₹30.95 | -18.35% | -21.91% |
Operating margin of 26.12% compares with a Healthcare sector median of 21.64% across 57 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- India business grew 14.7% year on year.
- India's chronic business grew 19.5% in H1, ahead of IPM growth of 17.2%.
Guidance & outlook
- The company plans to launch more than 20 products in FY27.
- The company plans to file more than 15 ANDAs in FY27.
- The company targets more than 100 NPLs and over 70% complex-product revenue by FY32.
- The company plans to launch at least six biosimilars by FY32.
Expansion
- The company plans strategic expansion in the hospital channel.
- The company is expanding its Extra-Urban division, Uday.
New initiatives
- The company strategically spun out two oncology programs to Kaveri Therapeutics.
- The company initiated developmental-batch supply under a CDMO technology-transfer deal.
- The company plans to transform Quality into a future-ready, digitally enabled function.
What to watch
- Whether operating margin moves back above 26.12% after two consecutive quarterly declines.
- Whether depreciation growth moderates from +53.39% YoY.
- Whether India business sustains +14.7% YoY growth.