Provision for a potential legal liability of Rs 1.6bn, high forex losses of Rs 1.7bn and an R&D expense of Rs 6.7bn (15.8% of net sales) led to a surprise sequential drop in Lupin?s (LPC) EBITDA margin to 18.4% in 4QFY17. As a result, net profit declined ~50%YoY to Rs 3.8bn. Revenue at ~Rs 41bn missed estimates by 8 to 9%, owing to lower US sales.