- US sales surged 46.8% YoY, adding $350 million to top‑line.
- Margin guidance lifted to 27‑28% for FY26, then eases to 24‑25% FY27.
- Mirabegron settlement with Astellas could lift FY27‑28 earnings 5‑16%.
- Visufarma acquisition in Europe provides a fresh growth catalyst.
- Peers face slower US growth; Lupin’s trajectory is uniquely bullish.
You missed Lupin's US breakout, and your portfolio paid for it.
Why Lupin's US Revenue Spike Beats Expectations
ICICI Securities' latest research highlights a 46.8% year‑over‑year increase in Lupin's U.S. revenue, reaching $350 million in Q3FY26. The surge was not a one‑off; it was powered by three core products—Tolvaptan, Mirabegron, and Spiriva—each carving out niche market share.
Tolvaptan is a vasopressin antagonist used for autosomal dominant polycystic kidney disease. While competitors may soon enter the space, Lupin's early mover advantage gives it pricing power for now.
Mirabegron (a β3‑adrenergic agonist for overactive bladder) is under settlement talks with Astellas, which, when resolved, promises a revenue tailwind. The settlement is expected to clear legal clouds and unlock the drug’s full commercial potential.
Spiriva (tiotropium) continues to dominate the chronic obstructive pulmonary disease (COPD) segment. Competitive pressure is distant, giving Lupin breathing room to consolidate margins.
The U.S. growth outpaces the Indian branded business, which still expands at a respectable 10‑12% annual rate. This dual‑track strategy diversifies risk and boosts the company’s global earnings profile.
How Lupin's Margin Guidance Stacks Against Pharma Peers
Management now targets a 27‑28% EBITDA margin for FY26, before a modest decline to 24‑25% in FY27. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) is a key profitability metric because it strips out financing and accounting decisions, focusing on operating performance.
By comparison, Tata Pharma and Sun Pharma project FY26 margins in the 22‑24% range, constrained by higher R&D spend and a larger exposure to price‑sensitive generic markets. Global peers such as Novartis and Pfizer are also seeing margin compression as patent cliffs hit, but their scale cushions the impact.Therefore, Lupin's margin outlook not only exceeds domestic peers but also aligns with the upper‑quartile of global specialty pharma firms, reinforcing its positioning as a high‑margin growth story.
What the Mirabegron Settlement Means for Future Cash Flow
The pending settlement with Astellas resolves lingering royalty disputes and clears the path for full commercial exploitation of Mirabegron in key markets. ICICI projects a 5‑16% earnings uplift for FY27‑28 once the settlement is booked.
Cash flow analysts note that the settlement will also reduce contingent liabilities, improving the company’s free cash flow conversion rate. A higher free cash flow provides leeway for share buy‑backs, debt reduction, or reinvestment into the VISUfarma pipeline in Europe.
Lupin vs Competitors: Tata Pharma, Sun Pharma, and Global Players
While Lupin leverages its US specialty portfolio, Tata Pharma is deepening its presence in emerging markets, focusing on oral anti‑infectives and cardiovascular drugs. Sun Pharma, meanwhile, is expanding its US generics footprint but is hampered by lower pricing power and higher regulatory risk.
Internationally, firms like AbbVie and Amgen rely heavily on blockbuster biologics, which face biosimilar competition. Lupin's blend of branded specialty drugs and generics offers a more balanced risk‑return profile, especially as the US market rewards specialty pricing.
Historical Parallel: Lupin’s 2015 US Expansion and Its Aftermath
In 2015, Lupin entered the U.S. market with a focus on generic antibiotics. Initial revenue contributions were modest, but the strategic acquisition of Gavis Pharmaceuticals in 2016 accelerated growth, pushing U.S. sales to $150 million by FY18.
That historical run‑up taught Lupin the importance of securing proprietary products (e.g., Tolvaptan) to protect margins. The current wave replicates that playbook, substituting generics with specialty branded drugs, thereby delivering higher margin upside.
Investor Playbook: Bull and Bear Cases
Bull Case: Continued US revenue acceleration, successful Mirabegron settlement, and the VISUfarma acquisition delivering €200 million incremental sales. Margin expansion to 28% FY26 and a stable 24‑25% thereafter support a price target of INR 2,200 (20× FY28E EPS). Portfolio allocation: 8‑10% of pharma exposure.
Bear Case: Unexpected competition in Tolvaptan, delayed VISUfarma integration, or adverse regulatory rulings in the US could blunt growth. Margin compression beyond 24% would force a target price cut to INR 1,800. Portfolio allocation: limit exposure to <5% or consider hedging.
Overall, Lupin’s dual‑engine growth—robust US specialty sales paired with steady Indian branded expansion—creates a compelling risk‑adjusted opportunity for investors seeking margin‑rich exposure in the pharma sector.