- 11 Nov 2024
- ICICI Securities
AUROBINDO PHARMA Q2FY25- REVENUES GROWTH A TAD SOFTER DUE TO US
News: Revenues grew ~8% YoY to ₹ 7567 crore driven by formulations growth in Europe and Growth markets. US growth on the other hand was subdued at 4% to ₹ 3530 crore and the slow-down was attributable to just 1% growth in Specialty & Injectables (~19% of US sales) which was lower than expected. Europe grew 19% to ₹ 2105 crore. Growth Markets grew 25% YoY to ₹ 812 core (including India formulations) on the back of new launches. ARV de-grew 23% to ₹ 229 crore. APIs were flat at ₹ 1156 crore. EBITDA grew 41% YoY to ₹1566 crore while EBITDA margins improved 66 bps to 20.1%. EBITDA growth was mainly driven by strong GPM improvement (~366 bps YoY to 58.8%). Adjusted PAT grew 9% YoY to ₹ 816 crore.
Views: The injectable business slowdown was not entirely unexpected given the cGMP remediation undertaken at the critical Eugia III facility. But the Q2 sales were even lower than the expectations. Going forward, sustainability of the margins will be the key determinant for investors' sentiment as the company plans to expand the R&D bandwidth and diversify into more complex models such as biosimilars. But on the other hand, the GPMs are expected to get boost due to commissioning of Pen G facility. Overall, Eugia III resolution and the launch momentum across geographies would be key determinants for investors sentiments. We wait for a detailed management commentary on the numbers and future margin guidance.
Impact: Neutral