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Aurobindo Pharma extends gains on turnaround Q2 results

Capital Market / 13:06 , Nov 04, 2009

Aurobindo Pharma rose 4.39% to Rs 783.25 at 13:06 IST on BSE, extending gains for the second consecutive day, after the company posted net profit of Rs 128.29 crore in Q2 September 2009 as against a net loss of Rs 38.50 crore in Q2 September 2008.

The stock had risen 0.14% to Rs 750.30 on Tuesday, 3 November 2009 in an otherwise weak market after the company declared its results after market hours on Friday, 30 October 2009. The market was closed on Monday, 2 November 2009 for a public holiday.

Meanwhile, the BSE Sensex was up 370.05 points, or 2.40%, to 15,774.99.

On BSE, 17,378 shares were traded in the counter as against an average daily volume of 35,162 shares in the past one quarter.

The stock hit a high of Rs 783.80 and a low of Rs 750 so far during the day. The stock had hit a 52-week high of Rs 891.40 on 27 October 2009 and a 52-week low of Rs 101.60 on 6 November 2008.

The stock has risen 4.54% in two trading sessions from a recent low of Rs 749.25 on 30 October 2009.

The mid-cap stock had outperformed the market over the past one month till 3 November 2009, falling 3.57% as compared to the Sensex's 10.09% fall. It had also outperformed the market in the past one quarter, rising 18.96% as compared to the Sensex's return of 3.26%.

The company's equity capital is Rs 26.88 crore. Face value per share is Rs 5.

The current price of Rs 783.25 discounts the company's Q2 September 2009 annualized EPS of Rs 95.45, by a PE multiple of 8.21.

Aurobindo Pharma's net sales rose 30% to Rs 826.31 crore in Q2 September 2009 over Q2 September 2008.

During the quarter ended September 2009, the company incurred a foreign exchange loss of Rs 3.70 crore.

Aurobindo Pharma had on 19 September 2009 received tentative approval from US Food and Drug Adminstration (US FDA) for its abbreviated new drug applications (ANDAs) Atomoxetine Hydrochloride capsules in multiple strengths and final approvals for Ribavirin tablets and Ribavirin capsules in 200 miligram (mg) each.

Atomoxetine Hydrochloride is the generic version of Strattera of Eli Lily and Company. The drug is used for treating attention-deficit/ hyperactivity disorder (ADHD) in children aged 6 and older, teens, and adults and falls under the neurological (CNS) segment. As per Newport, the drug has a market size of approximately $500 million in US market for the twelve months ended March 2009.

Ribavirin tablet is the generic Copegus and Ribavirin Capsules is generic equivalent to Rebetol of Schering Corporation. Ribavirin tablets and capsules are antiviral agents indicated in the treatment for adults with chronic Hepatitis C Virus who have compensated liver disease and have not previously been treated with interferon alpha.

Aurobindo, which started off as a supplier of drug raw materials to semi- regulated markets, has moved up the value chain and currently sells finished generic drugs in regulated markets.

Promoters have pledged more than 1.01 crore shares representing 18.86% of the equity capital of the company (as on 30 September 2009). Total promoters shareholding in the company is 58.99% (as on 30 September 2009).

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