- 12 Aug 2022
- ICICIdirect Research
Aurobindo Pharmaceuticals' revenues in line, margins trending lowAUROPHARMA - 479 Change: 10.80 (2.31 %)
News: Revenues grew 9% YoY to Rs 6236 crore amid a 11% YoY growth in US business to Rs 2971 crore and 28% YoY growth in ARV to Rs 380 crore. RoW markets grew by 31% YoY to Rs 431 crore while API segment posted growth of 12% YoY to Rs 906 crore. Europe Revenues declined 2% YoY to Rs 1548 crore. EBITDA margins were down 619 bps YoY to 15% mainly due to lower gross margins and higher other expenditure. EBITDA de-grew 22% YoY to Rs 936 crore against I-direct estimates of Rs 1033 crore. Adjusted Net Profit de-grew 32% YoY to Rs 520 crore.
View: Aurobindo Pharmaceuticals’ Q1FY23 revenues were above I-direct estimates on back of better offtake in RoW and ARV business while margins came in lower than expectations. Having significant exposure to US generics OSD space (68% in Q1FY23), the company continues to face challenges, however in current quarter US Injectable and ex-Injectable business have grown by 16% YoY and 4% YoY respectively. Injectable business, which looks promising, still accounts for just 26% of US business. Thus, higher OSD exposure along with ongoing cGMP issues are some medium term overhangs for the company besides dwindling margins.