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Informist, Monday, Aug 12, 2024

 

--Aurobindo Pharma:May revisit arm Eugia Pharma stake sale plan soon 
--CONTEXT: Aurobindo Pharma put plan to sell Eugia stake on hold FY24 
--Aurobindo Pharma: Investors showing interest in Eugia Pharma
--Aurobindo Pharma: Injectables sales to be back to normal Jul-Sep 
--CONTEXT: Aurobindo Pharma injectables ops hit on US FDA observations 
--Aurobindo Pharma: See Eugia unit-III remediation costs at $9 mln 
--Aurobindo Pharma:See injectables arm Eugia sales nearly $600 mln FY25 
--Aurobindo Pharma: Expect 21-22?ITDA margin for FY25 
--Aurobindo Pharma: Raw material costs softened in Apr-Jun
--Aurobindo Pharma: Expect China plant to be operational Oct-Dec 
--CONTEXT: Aurobindo Pharma mgmt comments in Apr-Jun earnings call 
--Aurobindo Pharma:To ramp up output at Kakinada Pencillin-G plant Oct 
 

By Narayana Krishna

 

HYDERABAD – After taking a pause for a year, Aurobindo Pharma Ltd wants to revive plan to sell stake in its injectables business arm Eugia Pharma Specialties Ltd soon, the company's management said in a post-earnings conference call. As regulatory issues around Eugia Pharma's units are more or less resolved, the company wants to revisit the stake sale plan, Aurobindo Pharma said.

 

Aurobindo Pharma has been trying to sell part of its stake in Eugia Pharma Specialities by way of initial public offer or through any other instrument to unlock the value. However, the company kept the plans on hold last year, as Eugia's plants were under the scrutiny of the US Food and Drug Administration. Mainly, its unit-III, which is a key revenue generator for the injectables business, got serious observations, forcing Aurobindo Pharma to stall its stake sale plans.

 

However, the company management said the issues around Eugia's plants were mostly resolved, and the company is looking to revive its plans to sell the stake. The management said several investors are showing interest in Eugia Pharma.  

 

Aurobindo Pharma's management said the injectables business, which took a hit due to regulatory issues, will also get back to normal from Jul-Sep. Eugia Pharma lost $20 mln per quarter in Jan-Mar as well as Apr-Jun as production at its unit-III was disrupted due to the US FDA's regulatory action.

 

In February, Aurobindo Pharma halted production at Eugia's unit-III as the unit got the nine observations from the US FDA. Recently, Eugia's Rajasthan unit also received official action indicated tag. The company expects total remedial costs for Eugia would be around $9 mln.

 

The management said both the plants were near to clearing the compliance issues, and it expects $600 mln sales for the injectables business for 2024-25 (Apr-Mar).

 

EBITDA GUIDANCE

Aurobindo Pharma today reported a consolidated net profit of 9.19 bln rupees, up 61% on year, while its revenue was up 10.5% on year to 75.67 bln rupees.

 

Aurobindo Pharma is expecting its earnings before interest, tax, depreciation and amortisation or EBITDA margin for the current fiscal at 21-22%. For Apr-Jun, the company reported its EBITDA margin at 21.4%. Management said the raw material costs softened compared to last year, and it is expecting the similar trend in input costs going forward.

 

The company said its upcoming China plant is expected to be operational during Oct-Dec. The company is likely to begin exports from the China plant to the European region.

 

Aurobindo Pharma is also expecting its green field Penicillin-G plant at Kakinada to begin large-scale production during Jul-Sep, and it will be ramped up to 80?pacity utilisation level by October.

 

At 1033 IST, Aurobindo Pharma's shares traded at 1,456.60 rupees on the National Stock Exchange, up 0.4% from its previous close.  End

 

US$1 = 83.95 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Manisha Baxla

 

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