Emkay Global Financial's report on Aurobindo Pharma
ARBP depicted strong execution across markets and reported a 5% beat in revenues. This, along with a better mix, reflected in a sharp 290bpsqoq expansion in gross margin, driving EBITDA higher at Rs13.5bn (vs. our est. of Rs11.8bn) and margin beat (21.8%, +130bps vs. our est.). PAT stood at Rs8.4bn and was aided by lower taxes (21% vs. usual run rate of 25-26%). US revenues stood at $413mn vs. est. of $400mn. Sales in injectable (-22% qoq), Natrol (-11% qoq) and branded oncology (-23% qoq) were impacted by Covid-19 (lower hospital sales/lower footfalls). The oral solid segment grew strongly by 10% qoq.
Outlook
Gross margins at 59.4% were the highest in the last 10 quarters, led by a better product mix (higher US, lower API; also new ARV tenders at higher margin). Other expenses were up 140bps qoq, while R&D was slightly lower qoq.
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