Aurobindo Pharma on Wednesday said its fiscal third -quarter profit rose 2.8 percent to Rs 595 crore, helped by higher sales of generic drugs in US and Europe markets.
The company posted a net profit of Rs 579 crore in the same period previous year. Total revenue rose 11.2 percent to Rs 4369.2 crore.
The company took a one-time charge of Rs 66.4 crore for the quarter due to US deferred tax assets and liabilities based on the new tax law which has resulted in reduction in federal corporate tax from 35 percent to 21 percent.
The EBITDA margin stood at 23.7 percent.
The net profit came in below the estimate of CNBC-TV18 analyst poll estimate of Rs 682 crore, while the revenues stood higher than Rs 4328.4 crore projection.
Sales of formulations or generic drugs, which contribute about four-fifths of total revenue, grew 14.1 percent to Rs 3,130.2 crore, compared with Rs 3,130.2 crore in the year-ago period.
Sales of active pharmaceutical ingredients (API), the key raw materials that go into the production of drugs, declined 1.3 percent to Rs765.7 crore.
The US formulation business contributed 44 percent to the total revenue and grew 9.4 percent to Rs 1,909.6 crore due to new product launches.
The European Union formulations business contributed 27 percent of total revenue and grew 37 percent to Rs 1,171.6 crore driven by strong growth in some of the key markets. The company said it has transferred manufacturing of 78 products from Europe to India to cut costs.
In January 2014, Aurobindo bought loss-making Western European commercial operations of Irish drug maker Actavis Plc for €30 million. The company was able to successfully turn around the acquired business by relying on its low cost Indian manufacturing arbitrage and launching more products.
Sales from rest-of-the-world market grew 33.2 percent to Rs 250.2 crore.
The antiretroviral (ARV) business dropped 30 percent during the quarter. ARV drugs used in treatment of HIV-AIDS contributes about 5 percent of Aurobindo’s gross sales.
“All our key markets continue to perform well and have shown a healthy growth trend,” said N Govindarajan, managing director of the company.
“Considering the one-off US tax charge, the profitability is in-line with our expectations,” Govindarajan added.
Govindarajan said the company will continue to invest in enhancing its specialty and complex generics pipeline for a sustainable growth.
During the third quarter, the company filed two abbreviated new drug applications (ANDA) with the US Food and Drug Administration (USFDA) and received 22 ANDA approvals from the USFDA. On a cumulative basis, the company received 351 approvals from the USFDA, including 38 tentative approvals.
The results were announced after market hours.
Shares of Aurobindo rose 3.44 percent to close at Rs 616.75 on BSE, while the benchmark Sensex dropped 0.33 percent to end 34,082.71 points.Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
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