India’s Aurobindo Pharma posts higher profit on steady domestic demand

Feb 9 (Reuters) – Indian drugmaker Aurobindo Pharma reported a 7.6% rise in profit on Monday, helped by steady domestic demand, especially for its anti-retroviral drugs for HIV infections.

Consolidated profit after tax in the third quarter rose to 9.1 billion Indian rupees ($100.37 million) from 8.45 billion rupees a year ago.

Consolidated revenue rose 8.4% to 86.46 billion rupees. The firm also recorded a one-time charge of 653.3 million rupees from India’s new labour law codes.

For further highlights on earnings, click [USN].

KEY CONTEXT

India’s generic drugmakers earn a sizeable share of their revenue from North America, where steep competition has driven down prices and squeezed margins. The United States accounted for 43.2% of Aurobindo Pharma’s quarterly consolidated revenue.

Aurobindo has also benefited from firm demand for its anti-retroviral therapies used to treat HIV.

Still, persistent price pressure in the North American generics market continues to weigh on drugmakers’ profitability.

Larger rivals Cipla and Dr. Reddy’s Laboratories also reported weak sales in the region this quarter.

PEER COMPARISON

Estimates (next 12 Analysts’ sentiment

months)

RIC EV/EBI Revenue Profit Mean # of Stock to Div

TDA growth growth rating analyst price yield

(%) (%) * s target** (%)

Aurobindo Pharma 8.90 12.33 17.53 Buy 25 0.89 0.34

Ltd

Zydus 14.34 7.15 -10.25 Hold 29 0.88 1.24

Lifesciences Ltd

Alembic 12.31 10.68 22.55 Buy 11 0.81 1.38

Pharmaceuticals

Ltd

Cipla Ltd 15.09 7.85 0.62 Hold 37 0.91 0.98

OCTOBER TO DECEMBER STOCK PERFORMANCE

— All data from LSEG

— $1 = 90.6680 Indian rupees

(Reporting by Kashish Tandon and Urvi Dugar in Bengaluru; Editing by Shailesh Kuber)