Earnings Outlook
US operations recovery to boost Aurobindo Pharma earnings
This story was originally published at 13:40 IST on 30 July 2024
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By Narayana Krishna
HYDERABAD - Recovery in the US business, mainly traction in the sales of injectables, is likely to help Aurobindo Pharma Ltd report a robust year-on-year growth in its Apr-Jun earnings, analysts said. The company is expected to report a consolidated net profit of 9.5 bln rupees on a consolidated revenue of 75.9 bln rupees, a year-on-year growth of 66% and 11%, respectively, according to an average of estimates of 10 brokerage houses. Sequentially, the company's net profit is seen 4% higher, but revenue is likely to remain flat, the estimates show.
Among the 10 estimates, HDFC Securities has the lowest estimate for Aurobindo Pharma's net profit at 8.7 bln rupees, while Kotak Institutional Equities' estimate is the highest at 10.4 bln rupees. For the company's revenue, the lowest estimate is by Yes Securities at 74.2 bln rupees, while the highest is by Kotak Institutional Equities at 77.6 bln rupees.
Meanwhile, the US business will see a recovery from the impact of supply disruptions at arm Eugia Pharma Specialities Ltd's Unit-3 plant during Jan-Mar due to the regulatory issues raised by the US Food and Drug Administration, an analyst said. Supplies have improved at Eugia Unit-3, which makes high margin injectable products for Aurobindo Pharma. Analysts expect to see new launches and steady traction in sales of generic drug Revlimid in the US. Aurobindo Pharma is one of eight companies that sell Revlimid in the US.
Brokerage InCred Equities expects Aurobindo Pharma to report US sales of $452 mln while Kotak Institutional sees these at $426 mln, excluding Revlimid sales. Analysts expect Aurobindo Pharma to have clocked $20-$30-mln sales of Revlimid generic, which is used in the treatment of cancer and has a market size of $3 bln.
In Europe region, Kotak Institutional Equities expects 3% on-year growth in revenue, while Motilal Oswal sees the metric rising by 7.5%.
Analysts expect to see a significant improvement in Aurobindo Pharma's June quarter earnings before interest, taxes, depreciation, and amortisation, or EBITDA, margins, led by improved product and geographical mix, softer raw material costs and strong operating leverage. Analysts' estimates for the company’s EBITDA margin for the June quarter range from 20.8-22.6% against 16.8% a year ago.
The average of estimates of nine brokerages available for Aurobindo Pharma Apr-Jun EBITDA is 16.4 bln rupees, while estimates range from 14.8-17.6 bln rupees.
Analysts expect an update from the company on the utilisation of recently launched Penicillin-G and other plants at Kakinada, besides the status of the resolution process of Eugia Pharma injectables plant. The company is yet to decide a date to announce its Apr-Jun earnings.
Following are the Apr-Jun earnings estimates for Aurobindo Pharma Ltd based on reports compiled by Informist from 10 brokerage houses:
|
Broker name |
Net Sales |
Net Profit |
EBITDA (in mln rupees) |
|
---(In mln rupees)--- |
|||
|
Axis Securities Ltd |
76,000.00 |
10,000.00 |
17,000.00 |
|
HDFC Securities Ltd |
75,847.00 |
8,749.00 |
15,776.00 |
|
Incred Research Services Pvt Ltd |
75,107.00 |
8,945.00 |
15,964.00 |
|
Kotak Institutional Equities |
77,646.00 |
10,436.00 |
17,584.00 |
|
KR Choksey Research |
75,579.00 |
8,975.00 |
16,098.00 |
|
Motilal Oswal Financial Services Ltd |
76,600.00 |
9,700.00 |
16,900.00 |
|
Nuvama Wealth Management Ltd |
74,885.00 |
8,945.00 |
14,844.00 |
|
Prabhudas Lilladher Pvt Ltd |
77,341.00 |
9,955.00 |
17,005.00 |
|
Sharekhan Ltd |
76,060.00 |
9,370.00 |
--- |
|
YES Securities (India) Ltd |
74,230.00 |
9,658.00 |
16,740.00 |
|
Average |
75,929.00 |
9,473.00 |
16,434.00 |
At 1230 IST, shares of the company were trading 0.2% lower at 1,402.40 rupees on the National Stock Exchange. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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