Buzzing stock: Aurobindo Pharma rallies 4% despite muted Q3 show

The company’s performance was impacted by high input and freight costs that brought down profitability.

Shares of Drug major, Aurobindo Pharma Limited was trading up by 4% intraday on Thursday despite recording weak numbers for the quarter ended December 2021 wherein the Hyderabad-based bulk and generic drugmaker's net profit slumped 80%.

In Q3, Aurobindo’s performance was impacted by high input and freight costs that brought down down profitability. Revenues, however, remained resilient led by active pharmaceutical ingredients (API) business with an increase in demand for key products. The API business grew 48% sequentially, contributing 17% to total revenue. Revenue from the formulation business which accounted for 83% of total revenue however fell 12% to Rs 4,992 crore. As a result, total revenues from operations (excluding Natrol) stood at Rs 6,002.2 crore, up 1.0% QoQ. EBIDTA before Forex and Other income at Rs 1,016.3 crore, while the EBITDA margin stood at 16.93%, contracting by 457 bps. The PAT was recorded at Rs 604.3 crore, down 80% as compared to the same period last year. The fall came on a high base as the company reported an exceptional gain of Rs 2,815 crore, largely from the sale of fully owned subsidiary Natrol LLC, in the year-ago quarter.

Aurobindo Pharma Vice-Chairman and Managing Director K Nithyananda Reddy noted that the company committed to resolving the regulatory issues affecting some of its facilities and are continuing to make steady progress in our complex generic product development plans. Aurobindo Pharma further intends to explore an entry strategy in the Indian branded formulations market and other allied healthcare opportunities either organically and/or inorganically and build a formidable business in this segment.

At 12 pm on Thursday, the stock of Aurobindo Pharma was trading at Rs 684, up by 4.38% or Rs 28.75 per share. The 52-week high of the scrip is recorded at Rs 1,063.75 and the 52-week low at Rs 590.25 on the BSE.

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