Shares of Aurobindo Pharma rallied 7.8 percent intraday on August 8 after June quarter earnings beat analyst expectations on all parameters.
India's second-largest drugmaker reported a 39.5 percent year-on-year growth in June quarter net profit at Rs 635.7 crore driven by strong sales growth from US, Europe and antiretroviral businesses.
Revenue during the quarter grew 28.1 percent to Rs 5,444.6 crore compared to year-ago with US formulation business growing 42.3 percent and EU formulations segment rising 16.1 percent YoY.
The antiretroviral drug sales doubled to Rs 318.5 crore over the year-ago period.
Sales of formulation or generic drugs, which contribute about 87 percent of total revenue grew 34.6 percent to Rs 4,712 crore compared with Rs 3,500.8 crore in the year-ago period, but sales of active pharmaceutical ingredients (API), the key raw materials that go into the manufacture of drugs, dropped 2.1 percent to Rs 732.2 crore.
“We have started the year with a healthy performance. Enhancing our quality management practices and adhering to the regulatory requirements continues to be our highest priority,” said N Govindarajan, Managing Director of the company.
At operating level, earnings before interest, tax, depreciation amortisation surged 61.3 percent to Rs 1,146.5 crore and margin expanded 440bps YoY to 21.1 percent in Q1.
Numbers were ahead of analyst estimates. Profit was expected at Rs 601.5 crore on revenue of Rs 5,216.7 crore and EBITDA was estimated at Rs 1,036.4 crore with margin at 20 percent for the quarter, according to a poll of analysts conducted by CNBC-TV18.
"Llooking at the broader picture of synergy and earlier history of successful acquisitions, we believe the company is well poised to manage this added burden. Aurobindo possesses one of the best enduring ecosystems among peers (vertically integrated model, lower product concentration), said ICICI direct which has a buy call on the stock with a target price at Rs 735, implying 32 percent potential upside from current level.
Aurobindo’s net debt dropped 18.3 percent on QoQ basis to Rs 4,093.9 crore.
The stock was quoting at Rs 593.55, up Rs 38.55, or 6.95 percent on the BSE at 1224 hours IST.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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