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Informist, Friday, May 22, 2026

 

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--Aurobindo Pharma: Business entering phase of calibrated growth from FY27 
--CONTEXT: Comments by Aurobindo Pharma's mgmt in post-earnings analyst call
--Aurobindo Pharma: See EBITDA margin improving to over 21% in FY27
--Aurobindo Pharma:May see US formulations revenue at $2 bln in couple of yrs
--Aurobindo Pharma: Confident of achieving double-digit growth in Europe
--Aurobindo Pharma: Not going for any big-bang acquisition in US as of now
--Aurobindo Pharma: See 7-8 biosimilar products in Europe, 3 in US by 2030
--Aurobindo Pharma: Biosimilar products to reach inflection point in 2030
--Aurobindo Pharma: Have invested $450 mln in biosimilars since 2018
--Aurobindo Pharma: Ran Kakinada Pen-G unit at 10,800 tn capacity in Apr
--Aurobindo Pharma: Kakinada Pen-G plant ran at 11,300 tn capacity in Mar 
--Aurobindo Pharma: Await USFDA nod for operations at Eugia Unit-III 
 

 

By Ruchira Kagita and Sunil Raghu

 

MUMBAI/AHMEDABAD – Aurobindo Pharma Ltd. sees its earnings before interest, tax, depreciation, and amortisation margin for 2026-27 (Apr-Mar) at 21%. The margin guidance is not incrementally higher than what was reported in FY26, and the forecast has factored in tailwinds from currency depreciation and headwinds from higher freight costs, the top executives of the company told analysts in a post-earnings conference call.

 

The company's business is entering a phase of calibrated growth from FY27, the management said. However, operating costs are expected to be higher for some time, given the high power and fuel consumption at the Penicillin G manufacturing unit.

 

The management of Aurobindo Pharma is bullish on sustaining growth in its Europe business. Highlighting that sales from Europe breached the 1-billion-euro mark for the first time in FY26, the management said this would grow northwards from this base despite the ongoing geopolitical distress. For the Europe business, the management is confident of achieving double-digit growth in constant currency terms.

 

For its biosimilars business, "we are right now in the early innings of launch," a top executive said. Some supplies have been initiated to some territories in the European Union. Denosumab and Omalizumab are to go into filing stage with the European Medicines Agency, Health Canada, and the US Food and Drug Administration in 2026. Over 2026, the pharmaceutical major expects three new filings in the US and seven-eight filings in Europe and emerging markets. These will likely fructify in around two years, the management said, and added that the biosimilars business will reach its "inflection point" in 2030.  

 

The company's efficient cost of goods sold model will help sustain its biosimilars business. The aspiration is not to "pick up 20–25% market share," the management said. It said it sees itself as one of the players to be involved in the first wave of launches of respiratory drug Omalizumab. There are currently three-four serious players in this space worth $3 billion–$4 billion. Celltrion has already launched a Omalizumab biosimilar. 

 

Upon commercialisation, gross margins for the biosimilars business are pegged at 65–70% even after pencilling in price erosion of 60–70%, a top executive said. Once the product mix in the business matures to include Denosumab, Omalizumab, and Subcutaneous Trastuzumab, gross margins can be expected at 70–75%. Growth potential in emerging markets is seen increasing once the business reaches its inflection point in the US, and gross margins are also expected to inch upwards. 

 

In the US, Aurobindo Pharma is eyeing revenue of $2 billion in a couple of years. While the management said that further clarity on this can only be given by the end of the September quarter, synergies from its acquisition of drugmaker Lannett Co. LLC will also contribute to this goal. In terms of new investments, the management said it is not "going for any big-bang acquisition".  

 

The management also shed some light on contributions from its China and India operations. It believes the China business will reach its breakeven point in FY27, and start contributing significantly. The business is expected to deliver low double-digit EBITDA margin in FY27, the management said. The India formulations division is also seen clocking double-digit growth this financial year.

 

Speaking about its domestic plants, the management said it ran its Penicillin G unit in Kakinada at a capacity of 10,800 tonnes in April, and 11,300 tonnes in March. Regarding its units run by Eugia Pharma Specialities Ltd., the top executives said they were still awaiting an establishment inspection report for Unit-III, while adding that Unit-I has been audited. 

 

Post market hours on Thursday, Aurobindo Pharma reported a consolidated net profit of INR 9.21 billion for the March quarter, up just 2% on year, while its revenue was up 5% on year at INR 88.53 billion. The company's US formulations business, which accounted for nearly 40% of the consolidated revenue, registered a 13% on-year fall at INR 35.43 billion. 

 

Its Europe business saw a sharp improvement, with formulation revenue from this region rising over 30% on year to INR 27.95 billion. Revenue from its growth markets, which comprise South Africa, Indonesia, China, India, Brazil and Canada, rose almost 25% to INR 9.80 billion. India formulations, part of the growth markets segment, registered revenue of INR 760 million, up from INR 740 million in the December quarter. Aurobindo Pharma started its India formulations business in 2022 and is working to scale it up.

 

For 2025–26 (Apr-Mar), the company's net profit rose 0.5% on year to INR 35.05 billion. Its revenue for the financial year rose over 6% to INR 336.53 billion. At 1144 IST, shares of the company were nearly 6% lower at INR 1,459.70 on the National Stock Exchange.  End

 

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

 

Edited by Avishek Dutta

 

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