Analyst Concall
Aurobindo Pharma China unit to begin exports to Europe Apr
This story was originally published at 13:02 IST on 7 February 2025
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--Aurobindo Pharma: Spent $106 mln as capex to up capacity in Oct-Dec
--Aurobindo Pharma: Net debt as of Dec 31 at $84 mln
--CONTEXT: Aurobindo Pharma mgmt comments in post-earnings conference call
--Aurobindo Pharma: Specialty, injectables sales $121 mln for Oct-Dec
--Aurobindo Pharma: To launch three biosimilar pdts in July quarter of FY26
--Aurobindo Pharma: Civil works has begun for new contract mfg facility
--Aurobindo Pharma: Aim to begin ops at new contract mfg unit in 2026
--Aurobindo Pharma: Filed 14 new peptide products for approval
--Aurobindo Pharma: China plant expected to contribute to revenues FY26
--Aurobindo Pharma: Expect FY25 EBITDA margin at around 21-22%
--Aurobindo Pharma: See robust growth in Jan-Mar aided by product launches
--Aurobindo Pharma: Scaling up production at Eugia-III injectables plant
--Aurobindo Pharma: May begin exports to Europe from China plant from April
--Aurobindo Pharma:See Eugia Unit-III capacity utilisation at 60-70% Jan-Mar
--CONTEXT: Aurobindo Pharma arm Eugia's Unit-III under US FDA scrutiny
--Aurobindo Pharma: Corrective measures at Eugia's Unit-III completed
--Aurobindo Pharma:Can't meet injectables ops demand on capacity constraints
--Aurobindo Pharma: 30-35% of R&D spending on biosimilar pdt development
--Aurobindo Pharma: Expect to launch 7 new biosimilar products by 2027
--Aurobindo Pharma:To ramp up production at Kakinada's Penicillin-G unit Apr
By Simran Rede and Narayana Krishna
MUMBAI/HYDERABAD – Aurobindo Pharma Ltd. expects its China facility to contribute to revenue in 2025-26 (Apr-Mar) as it may begin exports to Europe from the unit starting April, the company said in a post-earnings analyst conference call Friday. The company has already received approval from the European regulator for export from this plant.
Aurobindo Pharma expects to launch its products in the Chinese market after getting regulatory approvals from the country's regulators even as it explores options to export its products in the US and other geographies.
The company's China facility has a capacity of 2 billion units and expects a significant contribution to revenue once it scales up, it said. The Hyderabad-based pharmaceutical company also expects to increase capacity utilisation at its Andhra Pradesh-based Eugia-III injectables plant to 60-70% by the March quarter from current 50%. The company said in the post-earnings call that corrective measures at the Eugia-III plant injectables unit are completed. The unit was issued a warning letter by the US Food and Drug Administration in August.
The company further said it was unable to meet the demand for injectables due to capacity constraints. It will ramp up production at its Penicillin-G unit in Kakinada, Andhra Pradesh, by April, it said in the conference call. The pharmaceuticals company anticipates robust growth in the March quarter driven by new launches. It expects to launch seven biosimilar products by 2027.
The company has earmarked 30-35% of its research and development spending for the development of biosimilars, primarily driven by the phase-III clinical trial expenditure. Aurobindo Pharma said it plans to launch three biosimilar products in the July quarter of FY26. The company expects to start phase-I and phase-III clinical studies starting from the end of 2025 and early 2026.
Aurobindo Pharma expects its earnings before interest, tax, depreciation and amortisation, or EBITDA margin to be in the range of 21-22% for FY25, owing to stable raw material prices. The company reported an EBITDA of INR 20.6 billion for the December quarter, with margin at 20.4%. It also aims to start operations at its new contract manufacturing facility in Hyderabad by 2026. The civil works for a facility to manufacture mammalian cell culture products have commenced and is expected to begin operations in 2026, the company said. The plant is expected to start its first supply in 2028. It also plans to expand the current footprint of two bio-reactors of 15 kilolitres each by adding two more 15-kilolitre bioreactor lines.
The drugmaker's net debt was at $84 million as of Dec. 31. It reported a capital expenditure of $106 million to increase capacity in the December quarter. The company reported a consolidated net profit of INR 8.46 billion, down 9.7% on year, while its consolidated revenue for the quarter rose 8.5% on year to INR 79.79 billion. End
US$1 = INR 87.44
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Nishant Maher
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