Aurobindo Pharma declines 4% despite 23% YoY jump in June quarter profit

Interim dividend of Rs 1.25 per equity share of Re 1 has been approved by the board for FY21

Shares of Aurobindo Pharma dipped 4.47 per cent to Rs 892.25 on the BSE on Thursday despite the company reporting a 22.81 per cent year-on-year (YoY) rise in its consolidated net profit to Rs 780.68 crore for the quarter ended on June 30, 2020, mainly on account of robust sales in the US market.

Consolidated revenue from operations of the company stood at Rs 5,924.78 crore for the quarter under consideration. It was Rs 5,444.60 crore for the same period a year ago, Aurobindo Pharma said in a filing to BSE.

"Amid challenging times, we have started the financial year by reporting a healthy performance. We have ensured the business continuity without compromising the safety and wellbeing of our employees," the company's Managing Director N Govindarajan said.

US formulation revenue for the quarter ended June this fiscal was at Rs 3,107.1 crore as against Rs 2,688.4 crore in the first quarter of financial year 2020, registering a growth of 15.6 per cent year-on-year and accounting for 52.4 per cent of the consolidated revenue, the company said in a filing.

Interim dividend of Rs 1.25 per equity share of Re 1 has been approved by the board for financial year 2020-21, it said.

At 9:46 AM, the stock was trading 2.35 per cent lower at Rs 912.05 as compared to 0.36 per cent gain in the benchmark S&P BSE Sensex. Around 39 lakh shares have already changed hands on the counter on the BSE and NSE combined.

Motilal Oswal, which has a 'BUY' rating on the stock, said that Aurobindo's results were operationally in-line with the estimates.

"Growth in other segments was partially offset by revenue decline of 5 per cent YoY to Rs 1,320 crore in Europe (22 per cent of sales), and (b) 8 per cent YoY to Rs 290 crore in Growth Markets (5 per cent of sales). Gross margin (GM) was up 160bp YoY to 59.4% due to superior product mix. However, Ebitda margin at 21.2 per cent (v/s est. 20.5%) was almost flat YoY. As per centage of sales, this was due to increase in other expenses (+90bp), higher employee cost (+70bp), which was offset by R&D expense reduction (-20bp YoY)," it said.