Aurobindo Pharma’s revenue from operations for Q4FY18 rose 11.2% yoy to Rs4,049.1cr. EBITDA for Q4FY18 rose by 9.3% yoy to Rs788.1cr. EBITDA margins in Q4FY18 were at 19.5% vs. 23.7% in Q3FY18 and 19.8% in Q4FY17. PAT declined by 0.7% yoy to Rs 528.8cr in Q4FY18.
The US revenue for Q4FY18 witnessed a growth of 5.8% yoy to Rs1,738.8cr, accounting for 43% of consolidated revenue.
On constant currency basis, US revenue grew by 10.1% yoy to $271mn
Aurobindo has filed 11 ANDAs with USFDA including 2 injectables in Q4FY18 and 47 ANDAs including 16 injectables in FY18.
The EU revenue in Q4FY18 witnessed a robust growth of 48.2%yoy to Rs1,151.6cr, accounting for 28% of consolidated revenue.
On constant currency basis, EU revenue grew by 33.7% yoy.
Growth Markets' revenue increased by 6.4% yoy to Rs209.6cr in Q4FY18 and accounted for ~5% of revenue.
Unit-4 and Unit-12 have received clear status EIR but Unit 16 (antibiotics and injectables) has received three observations.
Plant utilization in oral segment is at optimal level while that in injectables is optimal at Unit-12, while Unit-15 (Non antibiotics, Solid & Liquid Orals) is catching up.
Revenue of the injectables business was $124mn/$35mn in FY18/Q4FY18, impacted due to the product recall.
ARV business should do well from H2FY19E with orders of combination ARV drugs (such as DTG).
Ex-Generis Farmaceutica, growth in the European markets was 7% yoy in Q4FY18. European business is expected to show higher profitability on the back of the continued shifting of manufacturing base to India.
US price erosion was 8% yoy and 1% qoq, management believes that the direction of price erosion is changing, historically price erosion was 5% yoy.
Management does not expect injectable to become commoditized over next 3-3.5 years.
Management has said that they need more time to evaluate the situation before providing guidance of the US business.
Queries on Ertapenem (Carbapenem antibiotic) have been addressed and approval is expected. Ertapenem is sensitive product which requires cold storage.
Omeprazole approval is expected by end H1FY19E and company has addressed queries on Toprol.
Management expects 12-14 OTC product launches in FY19E, will focus on low competition products supporting Rx-OTC switch. Double digit growth in Natrol (OTC division) expected.
R&D cost ~5% of sales, phase III trial its biosimilar may take the R&D expenses to 8-9% of sales in FY19E. API imports from China in FY18 at $400mn (65-70% of the FY18 COGS).
Customer consolidation has no material impact at this time and will have to watch the Rite aid - Albertsons merger.
The total gross debt is Rs4,771cr and interest cost is 2% in FY18 as almost all debt (Rs4,766.9cr) is FX denominated. Company maintains 40% of sales as working capital.
Aurobindo Pharma Ltd ended at Rs. 605.10, up by 11.1 points or 1.87% from its previous closing of Rs. 594 on the BSE.
The scrip opened at Rs. 600 and touched a high and low of Rs. 613.75 and Rs. 596.95 respectively. A total of 22,24,266 (NSE+BSE) shares were traded on the counter. The stock traded below its 200 DMA.
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