Aurobindo Pharma is a pharmaceutical company that specialises in manufacturing generic pharmaceuticals and active pharmaceutical ingredients across six segments - neurosciences, cephalosporins, gastroenterology, anti-retrovirals, anti-diabetics, and cardiovascular.
The market capitalisation of Aurobindo Pharma Limited, as of March 2018, is more than Rs.33,500 crore.
Company’s Wealth and Recent Performance
Aurobindo Pharma Q1 FY19 Results
- The pharma company reported a 12% decline in its net profit for the quarter between April-June 2018 to stand at Rs.455.7 crore as compared to Rs.518.5 crore posted last year during the same quarter period.
- Its total income rose by 16% to stand at Rs.4,294 crore for the first quarter of FY19 as against Rs.3,700 crore reported during the same period last fiscal.
- The company’s EBITDA dropped by 7.4% from last year to stand at Rs.779 crore and its operating margin contracted 460 basis points to 18.3% in the said quarter.
- Sales of Active Pharmaceutical Ingredients (API) - the key raw materials that are required for the production of drugs - inclined by 19.7% to stand at Rs.748 crore.
- Also, its sale of formulations or generic drugs, which contributes nearly four-fifths of the company’s revenue, rose by 14.7% to stand at Rs.3,500.8 crore for the quarter ending 30 June 2018 as compared to Rs.3,051 crore during the same period last year.
Aurobindo Pharma FY 2017-18 Annual Report
- The company’s total revenue from operations during the fiscal of 2018 stood at Rs.16,499.8 crore, up by 9.3% as compared to the previous fiscal.
- Its EBITDA before forex and other income rose by 10.3% to stand at Rs.3,788.5 crore with the EBITDA margin at 23%.
- The net profit after JV share, minority interest posted an incline of 5.3% year-on-year to stand at Rs.2,423.2 crore.
- The firm’s revenue from US formulation reported a rise of 9% to stand at Rs.7,442.1 crore as against Rs.6,827.2 crore during last year.
- As for the company’s Europe formulation, the revenue grew by more than 32.9% to stand at Rs.4,354.4 crore.
Aurobindo Pharma Q4 FY 2107-18 Results
- The drugmaker reported a fall in its net profit of 0.65% during the period between January-March 2018 which stood at Rs.528.8 crore as against Rs.532.2 crore during the same period last year.
- The firm’s revenue from operations for the said quarter grew by 11.2% to stand at Rs.4,049.1 crore as against Rs.3,641.63 crore in the same period last fiscal.
- The EBITDA margin for the said period stood at 19.9%.
- The stock price of Aurobindo Pharma dropped 18.9% during the said quarter as against 13.1% drop in the NSE Nifty Pharma Index.
Aurobindo Pharma Q3 FY 2017-18 Results
- The company’s revenue from operations in the third quarter stood at Rs.4,336 crore, in contrast to Rs.3,130.2 crore in the Q3 FY17. This translates into an 11% growth year-on-year. The same over a nine-month period in the FY18 amounts to Rs.12,450 crore.
- Similarly, the EBITDA (before forex and other income) for the September-December quarter was reported to be at Rs.1,026 crore - a 14.6% increase over the same period last year. Subsequently, the net profit for the quarter was Rs.595 crore and the same over 9M FY18 is Rs.1,894 crore. The company also spent 3.6% of its revenues on research & development.
- Aurobindo Pharma’s sales in US and Europe formulations witnessed an impressive growth over the last quarter. Its formulation sales in the United States, on a constant currency basis, grew by 13.8% year-on-year, whereas in Europe, the same metric grew by 30.5% year-on-year.
- It is also worth mentioning that Aurobindo Pharma filed 2 abbreviated new drug applications (ANDA) with the USFDA and also received final approval for 20 ANDAs. Furthermore, it also launched 8 new products in the last quarter.
- The board has also approved second interim dividend at 100% for the FY 17-18. The Earnings per Share (basic and diluted) over 9M FY18 stood at Rs.32.34.
Aurobindo Pharma Stock Trends in 2018
- The share price of Aurobindo Pharma on January 1, 2018, was Rs.690 on NSE and BSE. The stock price over the course of the month declined, indicating the start of a bearish trend. The company also updated its investors presentation in the same period. The closing price at the end of the month was Rs.629.55 on NSE, indicating that the stock lost roughly Rs.60 in its value since the start of the month.
- The decline continued in the month of February as well owing to weak global cues. The opening price on February 1 was Rs.628.60, and despite the announcement of a second interim dividend, Aurobindo Pharma stocks suffered. By mid-February, the stocks had entered Rs.500 territory but managed to bounce back soon thereafter. The closing price on February 28 on NSE was Rs.613.90.
- On the 1st of March, the stock rose by more than 10 points to end at Rs.624.10 and dropped further by more than 70 points to end at Rs.550.35 on the 26th before closing the month at Rs.557.85.
- The scrip gained about 35 points on the 1st of April to stand at Rs.592.55 and grew to end the month significantly higher at Rs.642.
- It dropped nearly 10 points on the first day of trading in May to stand at Rs.633.25 and fell significantly by about 70 points to close at Rs.565.50 on the 21st and declined further to end the month at Rs.556.30.
- The scrip decreased further on the 1st of June to stand at Rs.535.30; however, it recovered by the end of the month to gain more than 75 points to close at Rs.607.10 on the last day of the month.
- After gaining in the month of June, the stock price on the 2nd of July was valued at Rs.602.55 only to drop about 30 points to stand at Rs.567.85 on the 19th but rose by the end of the month to stand at Rs.591.55.
- On the 1st of August, the stock grew by 8 points to end the day at Rs.599.70 and witnessed a robust growth to gain more than 100 points to end the month at Rs.712.75.
Aurobindo Pharma Stock Trends in 2016 and 2017
- At the start of 2016, Aurobindo Pharma stocks were trading at roughly around Rs.860-870 on NSE and BSE. Over the next couple of weeks, the pharmaceutical conglomerate received approvals from the USFDA new drugs over various segments. Despite these developments (and the announcement of interim dividends), the stock price took a massive nosedive in early February and ended up touching Rs.600 by the end of the month.
- The stocks recovered healthily in March on the back of regular updates and developments, most of which were centered around the USFDA approvals. By early April, Aurobindo Pharma stock price had crossed Rs.700 and in May, it crossed Rs.800 once again. However, it failed to find its bearings there and at the end of May 2016, the stocks were once again being traded at around Rs.760-770.
- An interim dividend of 70% was announced in early June which was preceded by the announcement of FY16 financial results. However, as the month went by, it appeared that the stocks were going to enter the Rs.600 territory again but by late June, they staged an impressive recovery. Through most of July and August, the stock price remained above Rs.700. In September, on the back of strong Q1 FY17 results, the share price crossed Rs.850 on NSE and BSE.
- Through October, Aurobindo Pharma shares changed hands at above Rs.800. In November, the price fell slightly owing to demonetisation but the fall was not that severe. An interim dividend of 125% was announced in November. Things changed in December owing to a lawsuit in the United States. This led to a sharp dip in the share price and at the end of the year, the closing price was roughly Rs.670.
- The opening price in January 2017 was around Rs.674 on NSE and BSE. Things did not change dramatically over the course of next few weeks. In February, Q3 FY17 results were announced which showed a strong performance by the company. Things did not change considerably in the month of March either and the closing price of the stock at the end of the month was Rs.675.20 on NSE.
- A bearish trend began in April which lasted until June. Aurobindo Pharma stock price at the start of April 2017 was close to Rs.680 but by the end of May, the stocks had shed all their previous gains. One of the factors that led to this was the USFDA alert and as a result, the closing price on May 31, 2017, was Rs.574.15.
- The stocks bounced back in June on the back Q4 FY17 results and new drug developments by the company. An interim dividend of 125% also helped the stocks make additional gains on bourses. By mid-July, the share price had crossed Rs.700 and it managed to stabilise above that limit. Things remained roughly the same in the month of August as well and the closing price at the end of the month was around Rs.725 on NSE and BSE.
- Through most of September, the stock price of Aurobindo Pharma remained steadily above Rs.740. However, towards the end of the month, the price did witness a fall but it managed to recover by early October. In November, stocks soared beyond Rs.800 on the back of Q2 FY18 results but failed to sustain at that level. An interim dividend of 150% was announced in late November. Things did not vary significantly in December and the closing price at the end of 2017 was close to Rs.692 on NSE and BSE.
Should you invest in Aurobindo Pharma Limited?
- Aurobindo Pharma is a pharmaceutical company that specialises in manufacturing generic pharmaceuticals and APIs. It sells its products in more than 120 countries worldwide and is constantly expanding its product offering with extra emphasis on research and development.
- When we compare Aurobindo Pharma with its peers in the same sector, we will notice that the company is ranked lowly in terms of market capitalisation. At the same time, its net profit is far better than most of the companies on the list. This may imply that the company is financially sound, although a thorough research is needed.
- Furthermore, the stock price over the course of 2016 and 2017 shed its gains significantly. In this regard, other pharmaceutical companies may serve as a better option for long-term investment. It is advisable to perform your own research before investing.
Aurobindo Pharma Limited is a pharmaceutical company based in HITEC City, Hyderabad. The company manufactures active pharmaceutical ingredients as well as generic pharmaceuticals. The company mainly manufactures antibiotics, anti-retrovirals, anti-allergics, gastroenterology, central nervous system products as well as cardiovascular products.
The company markets and retails these products in over 125 countries and has partnered with pharma giants such as Pfizer and AstraZeneca. The company is also looking at expanding its product base to include cutting-edge drugs in oncology and new drug delivery systems such as inhalers and patches.
The company has also expanded its physical presence in Europe, acquiring Generis Farmaceutica SA in Portugal. It is also making inroads in other European markets. With over 75% of its revenue coming out of international operations, the company has sought to capitalise on its wide scope of products to gain a bigger foothold in emerging markets.
History of the Company
Aurobindo Pharmaceuticals Limited was established in the year 1986 by Mr. P.B. Ramaprasad Reddy, Mr. K. Nityananda Reddy and a group of other professionals in Hyderabad. The company began operations in 1989 at a manufacturing plant in Pondicherry. The company was listed on the exchanges in 1995 and has seen its operations grow significantly over the years. The company is a market leader in semi-synthetic penicillin manufacture and its emphasis on research and development has helped it tide over turbulent times for the industry.
Aurobindo Pharma Limited has opened manufacturing facilities across the world, with offices and manufacturing units in China, Japan, Thailand, U.K., the U.S.A. among a number of other countries.
The company bought the generic operations of Actavis for 7 European countries in 2014, raising its visibility in hitherto untapped markets.
Mr. Narayanan Govindarajan- Managing Director and Director
Mr. Govindarajan has served as the Managing Director of Aurobindo Pharma since June, 2012. Prior to this, he served as the Chief Executive Officer (CEO) from October 2010 to June, 2012.
He has been associated with the pharma sector for a number of years, serving as Managing Director of Shasun Pharmaceuticals from 2006-2010.
A mechanical engineer by profession, Mr. Govindarajan completed his degree from Annamalai University and pursued further studies at IIT Powai.
Mr. Santhanam Subramaniam- Chief Executive Officer
Mr. Subramaniam has served as the CEO of Aurobindo Pharma since July 2014. Prior to his appointment as CEO, he was associated with a number of companies as a Chartered Accountant, Cost Accountant and Company Secretary. He worked with Gulf Oil, Vedanta Resources and Dalmia Cements Bharath Limited in management capacities. He holds professional certifications from the Institute of Company Secretaries of India (ICSI), Institute of Chartered Accountants of India (ICAI) as well as the Institute of Cost and Management Accountants of India in addition to a Bachelor’s Degree in Science.
Aurobindo Pharma Limited Listings on NSE, BSE and Indices
Aurobindo Pharma shares can be traded on the Bombay Stock Exchange, the National Stock Exchange and other major indices. For the purpose of trading in Aurobindo Pharma shares, the following codes can be used:
In addition to the above indices, Aurobindo Pharma is also traded on other indices, a few of which have been listed below:
- Nifty 50
- Nifty Growth Sectors 15
- Nifty Pharma
- S&P BSE AllCap
- S&P BSE 100, S&P BSE Greenex
Aurobindo Pharma Limited has its registered headquarters at the following address:
Water Mark Building,
Plot No. 11,
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