Express Pharma

Aurobindo’s Q4FY20 performance – Strong execution; net debt reduces further:  ICICI Securitie

The capital market firm raised Aurobindo Pharma's earnings estimates by 5-6 per cent to factor in higher revenue in US & emerging markets with better gross margin

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“Aurobindo Pharma’s Q4FY20 performance was above our estimates of revenue/EBITDA/adj. PAT by 5.1 per cent/13.1 per cent/21.0 per cent respectively,” commented ICICI Securities on the financial results announced by the pharma major.

Aurobindo’s revenues grew by 16.4 per cent YoY to Rs61.6bn (I-Sec: Rs58.6bn), EBITDA margin improved 180bps YoY to 21.8 per cent (I-Sec: 20.3 per cent) and adjusted net profit grew 40.3 per cent YoY to Rs8.6bn (I-Sec: Rs7.1bn).

“Aurobindo reduced debt by $87mn in Q4FY20, taking cumulative debt reduction of $365mn in FY20. We remain positive on Aurobindo’s long-term outlook considering its strong US pipeline with potential to launch >30 products every year, significant balance sheet improvement with constant net debt reduction every quarter and increasing revenue contribution from complex generics (injectables, opthalmics, penems, etc.),” informed ICICI Securities.

Broad-based revenue growth
The firm analysed that though Aurobindo’s US revenues grew 17.0 per cent YoY, they also declined by 1.2 per cent QoQ to US$413mn (I