Aurobindo Pharma Q2 Results Review - U.S. Drags Down Overall Performance; Outlook Cautious: ICICI Direct

ICICI Direct Report

Aurobindo Pharma Ltd. missed our estimates on every front for this quarter. Revenues de-grew 3.4% to Rs 5739 crore due to the subdued performance in the U.S. as well as Europe.

Ebitda de-grew 33.4% YoY to Rs 791 crore while Ebitda margins de-grew 620 basis points to 13.8 bps. Adjusted net profit fell 41.1% YoY to Rs 410.4 crore.

U.S. price erosion continues. U.S. injectable and ex-injectable business have de-grown by 28% YoY and 15% YoY.

A dismal set of numbers undone by the U.S. (acute pricing pressure) and Europe (rupee appreciation).

Margins were also below par due to unfavourable products mix and higher other expenditure despite having vertically integrated model. Thus, higher oral solid dosage exposure along with ongoing current good manufacturing practice issues are some medium term overhangs for Aurobindo Pharma besides dwindling margins.

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