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Informist, Saturday, Oct. 25, 2025

By Narayana Krishna

HYDERABAD - Shutdown of its Kakinada plant and negligible contribution from cancer drug generic Revlimid are likely to weigh on Aurobindo Pharma Ltd.'s September quarter earnings, according to analysts tracking the company. However, steady sales from Europe and other international markets are expected to support overall performance for the quarter, they said.

Aurobindo Pharma is expected to report a consolidated net profit of around INR 9 billion, up 10% on year and 9% on quarter, based on the average of estimates from eight brokerages. Net sales for the quarter are expected to rise 4% on year and 3% sequentially to INR 81 billion, according to the estimates.

The highest net profit estimate of INR 9.8 billion is from Nuvama Wealth Management Ltd., while JM Financial Institutional Securities Ltd.  has the lowest estimate of INR 8.5 billion. Revenue estimates range from a high of INR 82.2 billion by Kotak Securities Ltd. to a low of INR 80.2 billion from JM Financial. The company will announce its September quarter earnings on Nov. 5.

Aurobindo Pharma is among the Indian drugmakers that had launched generic versions of Revlimid in the US market. Most analysts expect negligible or no contribution from the drug during the quarter, as increasing competition from multiple entrants has significantly eroded prices.

The US accounts for nearly 45% of Aurobindo Pharma's sales, followed by Europe at 30%, growth markets (other international markets) at 10%, with the rest coming from bulk drugs and anti-retroviral businesses.

"We anticipate another soft quarter for Aurobindo Pharma as its Pen-G (Penicillin-G) unit at Kakinada was under shutdown for most of the quarter. Additionally, we expect some softness in the US business due to the extended summer season, which may impact base business products," Nuvama said in a note.

Analysts' estimates for Aurobindo Pharma's September quarter US sales were in the range of $379 million by ICICI Securities Ltd and $418 million by Nuvama.

Europe sales are expected to grow 14% on year, according to Kotak, while Motilal Oswal pegs the growth at 8.6%. Nuvama estimates Europe and other international markets to grow 9% and 6% on year, respectively.

Analysts expect Aurobindo Pharma's earnings before interest, tax, depreciation, and amortisation  margin to improve slightly, as the company is not expected to book any further expenses related to the Kakinada plant. Estimates place the company's EBITDA margin for the September quarter in the 20.0–21.1% range, compared with 20.1% a year ago. The average of eight brokerages' estimates for Jul–Sept EBITDA stands at INR 16.6 billion, with a low of INR 16.2 billion and a high of INR 17.0 billion.

Analysts will look out for updates on the ramp-up of production at Unit-III of subsidiary Eugia Pharma Specialties Ltd., along with the outcome of the US FDA's re-inspection of the facility. The market is also tracking progress on new product launches and the integration of the recently acquired US business of Lannett Co., which remain key focus areas for investors.

Of the 16 research reports on the company available with Informist, 14 have a 'buy' or equivalent rating on the stock with an average target price of INR 1,436, while one has a 'hold' rating on the stock with a target price of INR 1,470, and one has a 'sell' rating with a price target of INR 1,100 per share.

The stock has fallen nearly 0.5% since the announcement of its June quarter earnings on Aug. 4. On Friday, the company's shares ended at INR 1,085 on the National Stock Exchange, down 1.3% from the previous close. 

Following are the Jul-Sept earnings estimates for Aurobindo Pharma Ltd. from eight brokerage firms in the descending order by the estimate of net profit:

End

US$1 = INR 87.85

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

Edited by Avishek Dutta

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