- 27 May 2024
- ICICI Securities
AUROBINDO PHARMA Q4FY24- WELL-ROUNDED GROWTH; SIGNIFICANT MARGIN EXPANSION
AUROPHARMA - 1197 Change: 8.90 (0.75 %)News: Revenues grew ~17% YoY to ₹ 7580 crore driven by formulations growth across segments. US grew 18% to ₹ 3588 crore on the back of strong specialty & injectables growth which grew 44% to ₹ 824 crore. Europe grew 10% to ₹ 1832 crore. Growth Markets grew 53% YoY to ₹ 903 core (including India formulations) on the back of new launches. ARV grew 50% to ₹ 238 crore. APIs on the other hand were flat YoY to ₹ 1019 crore due to persistent pricing pressure. EBITDA grew 67% YoY to ₹1673 crore while EBITDA margins were improved 660 bps to 22.1%. EBITDA growth was mainly driven by strong GPM improvement (~490 bps YoY to 59.6%). Adjusted PAT grew 101% YoY to ₹ 1030 crore.
Views: Strong US traction reflected on overall buoyant performance with significant margins improvement. The quality of the US portfolio is improving with growing contributions from specialty & injectables now account for ~24% of the US portfolio. 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. That said, the USFDA has qualified the Eugia III injectables plant as OAI which indicates 90% probability of warning letter. This plant is critical for Aurobindo. Although significant products are already approved (111 out of 143) the warning letter may lead to remedial costs and delay for the remaining products approval.
Impact: Neutral