India’s Aurobindo Pharma posts jump in profit on strong overseas demand

HYDERABAD (Reuters) – India’s Aurobindo Pharma Ltd reported a better-than-expected 84.9% rise in second-quarter profit on Thursday, driven by strong sales in core markets Europe and the United States amid stablising drug prices.

Consolidated net profit attributable to owners of the holding company rose to 7.57 billion Indian rupees ($90.91 million) from 4.09 billion rupees a year earlier. Analysts on an average had expected a profit of 6.22 billion rupees, according to LSEG data.

The Hyderabad-based company, which makes anti-infectives, anti-diabetic and oncology medicine, said revenue from operations rose 25.7% to 72.19 billion rupees.

U.S. formulation sales, the company’s largest segment accounting for 47% of its total revenue, rose 35.7% to 33.85 billion rupees, helped by strong performance in generic injectables unit Eugia. Europe formulation sales increased 16.7% to 17.69 billion rupees, contributing 24.5% to Aurobindo’s total revenue.

“This is yet another quarter with highest ever sales, driven by robust performance across the markets, and continued margin expansion, aided by operational leverage and efficiencies,” Vice-Chairman Nithyananda Reddy said.

Aurobindo, which derives majority of its revenue through exports, is also into contract manufacturing services and production of active pharmaceutical ingredients ((APIs) crucial to a drug’s desired health effect.

API sales rose 20.3% to 11.66 billion rupees.

India’s generic drug makers, which draw a significant share of revenue from the United States, are slowly recovering from the effects of eroding prices in the world’s largest drug market.

Shares of Aurobindo closed 1.52% higher on Thursday ahead of the results.

Rivals Sun Pharmaceutical and Dr Reddy’s reported better-than-expected second-quarter profits on strong demand from the United States.

($1 = 83.2650 Indian rupees)

(Reporting by Rishika Sadam; Editing by Maju Samuel)