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F C C B s g o n e , a l l e y e s o n m a r g i n s …
Aurobindo Pharma Q1FY12 results were a mixed bag. The net sales
increased by 17% YoY to | 1076.9 crore in line with our expectation of |
1090 crore. The growth in sales was driven by healthy growth in US
formulations, ARV formulations & SSP APIs businesses. Due to lower
licensing income and higher growth in low margins businesses like ARVs
& SSPs, the EBITDA margins declined by 340 bps to 15.2% YoY. The
company repaid FCCBs and booked entire YTM of | 319.8 crore in P & L
during the quarter. Tax credit of | 87 crore restricted net loss to | 123
crore during the quarter. Excluding EO, the adjusted net profit stood at |
110.3 crore.
ƒ US business continued to post healthy growth
Sales from US market increased by 26.7% YoY to | 274 crore
despite revenue loss of around | 40 crore from Unit VI on account of
import alert. The company has launched 3 products during the
quarter. It received approval for 6 products. So far, it filed 215
ANDAs with USFDA and received approvals for 138 products
(including 29 tentative approvals)
ƒ Improving capacity utilisation of Unit VII will drive sales growth
In the last fiscal, the company has commissioned Unit VII SEZ
formulation facility. The current capacity utilisation of this facility is
less than 30%. In Q1FY11, the revenues from this facility were
around US$ 30 million. Aurobindo expects sales from this facility to
be around US$ 150-175 million for FY13.
V a l u a t i o n
We have reduced our FY13E EPS targets by 9% due to some visible
pressure on margins mainly to address the corrective measures at all of
the facilities. We have also cut our price target accordingly. Even then it
remains a strong buy candidate as we believe the correction in the stock
is overdone and it is one of the cheapest available pharma stocks with
good earning history and proven capability and capacity. We value stock
at | 233 based on 9x FY13E EPS of | 25.9. Existing share holders who
bought the stock at | 193 at the time of Q4FY11 update can continue to
hold the same.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
F C C B s g o n e , a l l e y e s o n m a r g i n s …
Aurobindo Pharma Q1FY12 results were a mixed bag. The net sales
increased by 17% YoY to | 1076.9 crore in line with our expectation of |
1090 crore. The growth in sales was driven by healthy growth in US
formulations, ARV formulations & SSP APIs businesses. Due to lower
licensing income and higher growth in low margins businesses like ARVs
& SSPs, the EBITDA margins declined by 340 bps to 15.2% YoY. The
company repaid FCCBs and booked entire YTM of | 319.8 crore in P & L
during the quarter. Tax credit of | 87 crore restricted net loss to | 123
crore during the quarter. Excluding EO, the adjusted net profit stood at |
110.3 crore.
ƒ US business continued to post healthy growth
Sales from US market increased by 26.7% YoY to | 274 crore
despite revenue loss of around | 40 crore from Unit VI on account of
import alert. The company has launched 3 products during the
quarter. It received approval for 6 products. So far, it filed 215
ANDAs with USFDA and received approvals for 138 products
(including 29 tentative approvals)
ƒ Improving capacity utilisation of Unit VII will drive sales growth
In the last fiscal, the company has commissioned Unit VII SEZ
formulation facility. The current capacity utilisation of this facility is
less than 30%. In Q1FY11, the revenues from this facility were
around US$ 30 million. Aurobindo expects sales from this facility to
be around US$ 150-175 million for FY13.
V a l u a t i o n
We have reduced our FY13E EPS targets by 9% due to some visible
pressure on margins mainly to address the corrective measures at all of
the facilities. We have also cut our price target accordingly. Even then it
remains a strong buy candidate as we believe the correction in the stock
is overdone and it is one of the cheapest available pharma stocks with
good earning history and proven capability and capacity. We value stock
at | 233 based on 9x FY13E EPS of | 25.9. Existing share holders who
bought the stock at | 193 at the time of Q4FY11 update can continue to
hold the same.
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