Lupin Q2 profit falls 22% despite sales growth

Lupin Limited (NSE: LUPIN) reported a mixed Q2 FY27 performance, with revenue from operations increasing 11.1% YoY to ₹7,827 crore. However, consolidated net profit declined 22.2% to ₹1,155 crore, compared with ₹1,485 crore in the corresponding quarter last year. Key Highlights • Product sales increased 14% YoY to ₹7,786 crore. • EBITDA declined 10.7% to ₹2,171 crore. • EBITDA margin contracted to 27.9% from 35.6%, a decline of 770 basis points. • US sales grew 9.3% to ₹3,020 crore. • India sales increased 14.7% to ₹2,384 crore. • Other Developed Markets recorded strong growth of 45.7%. • R&D investment stood at ₹618 crore, representing 7.9% of sales. My View Lupin's Q2 results present a clear contrast between healthy revenue growth and declining profitability. Growth in India, the US and other developed markets is encouraging. However, the 770-basis-point contraction in EBITDA margin is a concern. Employee costs increased 28.8%, while manufacturing and other expenses rose 23.2%. These cost pressures affected operating profitability despite healthy sales growth. The company's continued investment in R&D and product approvals remains important for its long-term growth pipeline. What I'm Watching Next I will monitor EBITDA margin recovery, US product launches, India market growth and the company's ability to control operating expenses. A return towards previous margin levels will be important for sustainable earnings growth. Stance: Cautiously positive on revenue growth and market expansion, but cautious about margin compression and declining profitability. Disclosure: I do not have any holding or position in the stock mentioned above. LUPIN