Aurobindo Pharma up 3% in weak market, rebounds 6% from Wednesday's low

Aurobindo's management maintains confidence in achieving an internal EBITDA margin target of 20-21 per cent for FY26, supported by strong operating leverage and a diversified business model.

Aurobindo Pharma share price today

Shares of Aurobindo Pharma were up 3 per cent at ₹1,194.90 on the BSE in Thursday’s intra-day trade in an otherwise weak market.  

The stock price of the pharmaceutical company has bounced back by 6 per cent from its Wednesday’s low of ₹1,130, after the company issued clarification to media reports regarding the USFDA inspection at the company’s Unit VII. Yesterday, the stock had declined 5 per cent in intra-day trade.  

At 12:05 PM; Aurobindo Pharma stock was quoting 3 per cent higher at ₹1,194.25, as compared to 0.77 per cent decline in the BSE Sensex.  FOLLOW STOCK MARKET UPDATES TODAY LIVE

 

Why did Aurobindo’s stock price fell 5 per cent on Wednesday?

As per media reports, the United States Food and Drug Administration (USFDA) inspection at Aurobindo Pharma’s Unit VII highlighted multiple deficiencies in manufacturing and quality control systems. In a critical finding, a microbiologist responsible for sample collection was observed to have falsified sample collection records.  Other observations included gaps in laboratory documentation despite established systems, lack of continuous GMP training, inadequate controls over computerized systems, and shortcomings in environmental monitoring within manufacturing areas, among others.

Aurobindo’s clarification on the USFDA inspection

Aurobindo Pharma in an exchange filing on Wednesday after market hours said that the company routinely undergoes regulatory inspections across its manufacturing facilities by global regulatory authorities, including the USFDA, as part of normal business operations.  

Any observations issued during such inspections are addressed in accordance with established regulatory processes. Where required under applicable regulations, the company makes appropriate disclosures to the stock exchanges in a timely manner, the company said. 

As intimated to the stock exchanges on February 10, 2026 with regard to completion of the USFDA inspection at Unit-VII of Aurobindo Pharma, the company said that it would be responding to the USFDA within the stipulated timelines. 

At present, there is no material event or information that requires further disclosure, other than what has already been disclosed to the exchanges, the company said.  ALSO READ | ONGC, Oil India rally up to 4%; BPCL, HPCL, IOCL fall 3%; here's why

Brokerages view on Aurobindo

Considering the gravity of the observations, the facility could face heightened USFDA scrutiny with a potential Official Action Indicated (OAI) classification. The site manufactures oral solids and currently has five tentatively approved products and seven filings under review, which may see launch delays, ICICI Securities said in a note. 

However, the brokerage firm believes Aurobindo may mitigate the impact by shifting filings to alternate sites, limiting any material earnings downside. That said, remediation expenses and compliance efforts are likely to weigh on margins and near-term profitability, it added. 

Aurobindo’s outlook is anchored by a transition from high-intensity capex to operational monetization across its global footprint. Management maintains confidence in achieving an internal EBITDA margin target of 20–21 per cent for FY26, supported by strong operating leverage and a diversified business model.  

In the US, the Dayton facility has entered its commercial phase, with meaningful revenue contributions expected from FY27, while the pending Lannett acquisition, targeted for a Q1FY27 close, is expected to further strengthen the base business, Axis Securities said in the Q3 result update. 

Europe remains a key growth driver and is firmly on track to exceed $1 billion in annual revenue by FY26- end. A major structural tailwind is the Pen-G facility, where production is ramping up to an annualized 10,000 MT.  

Following the MIP notification, management expects meaningful profitability improvement and enhanced cost competitiveness from Q1FY27. Additionally, the China OSD plant is progressing toward EBITDA breakeven in Q4FY26, while the biosimilars business is being positioned for a major commercial inflection in CY29, the brokerage firm said. It has a ‘buy’ rating on Aurobindo with a target price of ₹1,345 per share.  ===========================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.