Aurobindo Pharma surges 5% on strong Q4 results

NEW DELHI: Shares of Aurobindo Pharma climbed over 5 per cent in Thursday’s trade after the drug maker reported a 45.07 per cent year-on-year (YoY) jump in consolidated net profit at Rs 848.99 crore for the March quarter. The drug maker had posted a net profit of Rs 585.22 crore in the corresponding period of last year.

Gross margin for the quarter at 59.4 per cent was the highest in the last 10 quarters, led by a better product mix. Gross margin stood at 56.5 per cent in the year-ago quarter.

Following the development, the stock rose 5.37 per cent to hit a high of Rs 791 in early trade on BSE.

“Strong execution and debt reduction should continue to drive the stock’s outperformance. Aurobindo Pharma is one of our top large cap picks and a significant overweight,” said Emkay Global.

The company management will have an investor call at 5.30 pm today.

Emkay said investors would seek clarity on the impact of Covid-19 on business and whether Q4 revenue beat was led by pre-buying and if it is sustainable. Besides, they may seek reasons for gross margin expansion and update on NDMA issues in Metformin and key filings in the US.

On Wednesday, Aurobindo Pharma Managing Director N Govindarajan said: "We have closed 2019-20 with a healthy performance in fourth quarter. The growth was seen across all our geographies. Diversified product basket has helped us to maintain the growth momentum in our core geographies like USA and Europe."

“The company remains focused on strengthening its existing businesses, developing a differentiated and specialty product basket and regulatory compliance, he added.