Aurobindo Pharma Q1 net profit seen at Rs 539.5 crore

Aurobindo Pharma-Natrol acquisition | Year: December 2014 | Deal size: USD 132.5 million Objective: To foray into nutraceuticals in US. Result: The acquisition turned profitable from the second year with revenue from the acquired business increasing by over 12 percent CAGR over FY15-17. Natrol continues to be a stable growth contributor for Aurobindo’s OTC franchise.

 

India’s second largest drug manufacturer Aurobindo Pharma is likely to report a net profit of Rs 539 .5 crore for the first quarter of FY19, going by an average of estimates of analysts polled by Reuters.

The rise in the company’s net profit will be led by sales in US and Europe.

The company had reported a net profit of Rs 518.5 crore in Q1 FY18.

The analysts polled by Reuters see revenue rising 13 percent year-on-year to Rs 4,091.8 crore. Earnings before interest, tax, depreciation and ammortisation (EBITDA) is seen coming in at 22 percent.

“We expect US sales ($280 million) to remain stable as ramp-up in gArixtra (fondaparinux sodium injection) is likely to offset base erosion and impact from product recalls,” Edelweiss Research said in a recent report.

“We expect Europe to grow 25 percent YoY, driven by Generis acquisition and 13 percent appreciation in the euro-rupee. EBITDA margin to decline 22 percent from a 23 percent run-rate in FY18,” it added.

Another brokerage, Nirmal Bang predicted earnings to be flat sequentially in the first quarter as the US business did not witness any major product launches. “We have factored in about $15 million revenue from the US business sequentially and expect Europe and emerging markets to grow marginally by 2 percent.”

It expects revenue and EBITDA to grow 1.2 and 5.2 percent, respectively, and PAT to witness a fall of 1.2 percent because of a higher effective tax rate of 25 percent.

Aurobindo has a pipeline of 117 products and targets to launch 30 Abbreviated New Drug Applications (ANDAs) in FY19. It has some niche opportunities such as Toprol XL and Vanocmycin.

The recent establishment inspection report (EIR) for Unit 4 facility should bolster new injectables launches soon.