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Aurobindo Pharma surges on reporting turnaround in Q1

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Last Updated : Aug 12 2013 | 11:59 PM IST

Aurobindo Pharma jumped 8.38% to Rs 174.55 at 9:51 IST on BSE after the company reported consolidated net profit of Rs 18.60 crore in Q1 June 2013, as against net loss of Rs 128.91 crore in Q1 June 2012.

The Q1 result was announced on Friday, 9 August 2013. The stock market was closed on that day on account of Ramzan Id.

Meanwhile, the S&P BSE Sensex was up 53.61 points or 0.29% at 18,842.95.

On BSE, 1.92 lakh shares were traded in the counter as against average daily volume of 2.75 lakh shares in the past one quarter.

The stock hit a high of Rs 176.65 and a low of Rs 166.15 so far during the day. The stock had hit a 52-week high of Rs 204.90 on 7 January 2013. The stock had hit a 52-week low of Rs 99.65 on 10 August 2012.

The stock underperformed the market over the past one month till 8 August 2013, sliding 16.25% compared with the Sensex's 2.77% fall. The scrip had also underperformed the market in past one quarter, declining 16.88% as against Sensex's 6.01% fall.

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The mid-cap pharma company has equity capital of Rs 29.12 crore. Face value per share is Re 1.

Aurobindo Pharma's consolidated total operating income rose 41.3% to Rs 1715.60 crore in Q1 June 2013 over Q1 June 2012. Earnings before interest, taxation, depreciation and amortization (EBITDA) before forex surged 120.1% to Rs 307.70 crore.

Formulation sales rose 68.1% to 1100.50 crore in Q1 June 2013 over Q1 June 2012. API sales grew 10.2% to Rs 649.90 crore. Formulation sales constitute 63% and API constitutes 37% of gross sales in Q1 June 2013.

Commenting on the company's Q1 performance, Mr. N. Govindarajan, Managing Director, Aurobindo Pharma said: "Our focus on costs and the qualitative aspect of sales across key markets have reflected positively on our revenues and operating margins on a year on year basis. Our reported bottom-line got impacted by the mark-to- market component of our Dollar denominated debt because of Rupee depreciation during the quarter. We continue to make steady progress in achieving our strategic objective of strengthening our business mix towards more differentiated product and service offerings to our customers."

Aurobindo Pharma's board of directors at a meeting held on 9 August 2013, considered that in order to strengthen and provide focused growth to the injectable business and to leverage strategic opportunities, the board considered the option of spin-off of the injectable business to a wholly owned subsidiary as a going concern. The board constituted a sub-committee consisting majority of independent directors to evaluate the draft scheme of arrangement placed before the board on 9 August 2013 and recommend final scheme to the board for consideration in no later than 60 days from 9 August 2013.

The board approved in-principle, the following acquisition and joint venture opportunities through its wholly owned subsidiary viz. to acquire 60% of an upcoming manufacturing facility (under construction) being established by Celon Laboratories to manufacture Hormonal and Oncology products for a total cash consideration of Rs 15.60 crore and to further invest towards completion and approval of the facility including new product developments in above therapeutic areas with budgeted investment outlay of Rs 32.30 crore over next 12 months

The board has decided to acquire 57% of the equity stake in Silicon Life Sciences (Silicon), a company engaged in manufacture of non-sterile penems, from its existing shareholders of 49% from VVR group and 8% from Trident Chemphar. Post this acquisition, the equity holding of the company would increase to 75%, thereby making Silicon a subsidiary of the company.

Aurobindo Pharma manufactures generic pharmaceuticals and active pharmaceutical ingredients. The company's manufacturing facilities are approved by several leading regulatory agencies like USFDA, UK MHRA, WHO, Health Canada, MCC South Africa, ANVISA Brazil. The company's robust product portfolio is spread over 6 major therapeutic/product areas encompassing Antibiotics, Anti-Retrovirals, CVS, CNS, Gastroenterologicals, and Anti-Allergics. The company is marketing these products globally, in over 100 countries.

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First Published: Aug 12 2013 | 9:52 AM IST

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