Aurobindo Pharma (AUROPHARMA) Q4 09/10 earnings summary

Executive summary

• Consolidated revenue rose 15.3% YoY to ₹36,513.4 million; net profit reached ₹5,634.0 million, supported by higher volumes, formulations growth and cost efficiencies.

• Growth and capacity investment continued despite recessionary conditions, price competition and currency volatility; standalone long-term secured debt was fully repaid by year-end.

Financial highlights

• Consolidated gross sales were ₹36,513.4 million in FY10, versus ₹31,677.0 million in FY09; standalone gross turnover rose 15% to ₹33,196.0 million.

• Consolidated net profit was ₹5,634.0 million versus ₹1,002.6 million; diluted EPS was ₹89.12 versus ₹15.49.

• Standalone PAT after exceptional items was ₹5,257.6 million versus ₹1,285.4 million; diluted EPS was ₹83.16 versus ₹19.86.

• Standalone EBITDA excluding foreign-exchange adjustments was ₹7,723.6 million, up 47.9% YoY; adjusted EBITDA margin was 23.3% versus 18.1%.

• Standalone PAT excluding the ₹855.8 million FX gain was ₹4,401.8 million versus normalized PAT of ₹3,563.6 million in FY09, up 23.5%.

Outlook and guidance

• Revenue target: $2 billion within three years, also stated as FY13; priorities include capacity utilization, new product launches, efficiency and margin improvement.

• Unit VII SEZ began commercial production in June 2010; utilization was expected to reach 50% in the quarter beginning January 2011, with full utilization in H1 FY12.

• Full benefit from recent capacity investments was expected in FY12; planned actions include faster launches, cost containment and stronger operating cash flow.

• Fitch assigned a national long-term issuer rating of AA-(ind) with Stable Outlook, citing improved credit profile and expected utilization, growth and profitability gains.