Aurobindo Pharma declines 4% despite 23% YoY jump in June quarter profit

Shares of Aurobindo Pharma dipped 4.47 per cent to Rs 892.25 on the BSE on Thursday despite the company reporting a 22.81 per cent year-on-year (YoY) rise in its consolidated net profit to Rs 780.68 crore for the quarter ended on June 30, 2020, mainly on account of robust sales in the US market.

Consolidated revenue from operations of the company stood at Rs 5,924.78 crore for the quarter under consideration. It was Rs 5,444.60 crore for the same period a year ago, Aurobindo Pharma said in a filing to BSE.

"Amid challenging times, we have started the financial year by reporting a healthy performance. We have ensured the business continuity without compromising the safety and wellbeing of our employees," the company's Managing Director N Govindarajan said.

US formulation revenue for the quarter ended June this fiscal was at Rs 3,107.1 crore as against Rs 2,688.4 crore in the first quarter of financial year 2020, registering a growth of 15.6 per cent year-on-year and accounting for 52.4 per cent of the consolidated revenue, the company said in a filing.

Interim dividend of Rs 1.25 per equity share of Re 1 has been approved by the board for financial year 2020-21, it said.

At 9:46 AM, the stock was trading 2.35 per cent lower at Rs 912.05 as compared to 0.36 per cent gain in the benchmark S&P BSE Sensex. Around 39 lakh shares have already changed hands on the counter on the BSE and NSE combined.

Motilal Oswal, which has a 'BUY' rating on the stock, said that Aurobindo's results were operationally in-line with the estimates.

"Growth in other segments was partially offset by revenue decline of 5 per cent YoY to Rs 1,320 crore in Europe (22 per cent of sales), and (b) 8 per cent YoY to Rs 290 crore in Growth Markets (5 per cent of sales). Gross margin (GM) was up 160bp YoY to 59.4% due to superior product mix. However, Ebitda margin at 21.2 per cent (v/s est. 20.5%) was almost flat YoY. As per centage of sales, this was due to increase in other expenses (+90bp), higher employee cost (+70bp), which was offset by R&D expense reduction (-20bp YoY)," it said.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel