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Informist, Thursday, Oct. 29, 2026

 

By Narayana Krishna

 

HYDERABAD – Aurobindo Pharma Ltd. is expected to post robust earnings growth in the September quarter, driven by strong performance in the US and European markets, contributions from recent product launches, and the acquired Lannett's business. The company's export-led operations are also expected to benefit from a weaker rupee, while the Penicillin-G facility in Kakinada is likely to support growth during the quarter.

 

Aurobindo Pharma is expected to report a 33% on-year and 5% sequential rise in its September consolidated net profit to INR 11.3 billion, while revenue is expected to grow 17% on-year and 6% on-quarter to INR 97.2 billion, according to the average of estimates from 11 brokerages.

 

The highest estimate for Aurobindo Pharma's September-quarter net profit is INR 12.0 billion by Elara Securities (India) Pvt. Ltd., and the lowest is INR 10.7 billion by HDFC Securities Ltd. The highest revenue estimate is INR 102.8 billion by Elara Securities, and the lowest is INR 92.1 billion by Axis Securities Ltd.

 

The company will announce its September-quarter earnings on Nov. 4.

 

ACQUISITION BOOST

Aurobindo Pharma's US business is expected to benefit from consolidating its acquired US company, Lannett Co. Inc., according to analysts. In June, Aurobindo Pharma acquired Lannett through its US arm for an estimated $250 million.

 

Along with Lannett, recent product launches and steady growth in oral solid dosage sales are likely to lift Aurobindo Pharma's US performance in the latest quarter, while the decline in generic Revlimid sales and moderation in injectables are likely to offset part of the gains, according to the analysts.

 

Aurobindo Pharma's September-quarter US sales estimates range from $396 million to $474 million. The highest estimate is $474 million, up 14% year-on-year, from Nuvama Wealth Management Ltd., and the lowest is $396 million, down 4% year-on-year, from Axis Securities.

 

Along with the Lannett consolidation, generic Advair and generic Pomalyst are likely to help the company report higher US numbers, according to Nuvama Wealth. The decline in generic cancer drug Revlimid is likely to drag on US numbers, according to Axis Securities.

 

Excluding Lannett, the company's US sales are expected to rise 1.5% sequentially to $405 million, though this would represent a 3% on-year decline, according to Kotak Securities. The brokerage has factored in $59 million in sales from Lannett for the quarter, consolidated from Jul. 1, taking the total US sales to $458 million, up 10% on year and 15% on quarter.

 

EUROPE SALES

In Europe, Aurobindo Pharma is expected to sustain growth, supported by stable demand, an expanding product portfolio, new launches and deeper market penetration, according to brokerages tracking the company.

 

Analysts' estimates for the company's sales growth in Europe for the quarter range from 8% to 23% year-on-year. The highest estimate for sales growth in Europe is 23% by Kotak Securities and the lowest is 8% by Nuvama Wealth, which expects sales of 261 million euros. Axis Securities expects Aurobindo Pharma's Europe sales to grow 10% to $323 million, while Motilal Oswal sees a 17% growth to INR 29.1 billion.

 

Aurobindo Pharma's growth markets segment sales are expected to expand, supported by improving market penetration. Axis Securities expects growth markets to report 30% on-year sales growth, while Kotak Securities projects an 11% growth.

 

The company's antiretroviral segment, which is mostly tender-driven, is expected to report a 14% on-year decline in sales, against a high base, according to Kotak. Aurobindo Pharma's formulation business in India is expected to gain momentum in the September quarter, with the company projected to report a 29% on-year rise in sales to INR 1.05 billion, according to HDFC Securities.

 

The company's penciling-G facility at Kakinada is likely to contribute significantly to the quarter's overall growth, according to Prabhudas Lilladher.

 

MARGINS

Aurobindo Pharma's earnings before interest, tax, depreciation and amortisation are expected to grow on year, supported by revenue growth, operating leverage and the benefit of rupee depreciation. However, lower profitability at Lannett and the launch of the dermatology speciality division in the US are expected to impact margins, according to analysts.

 

The company's September quarter EBITDA is pegged at INR 20.2 billion, up 5% on year and 20% on quarter, according to the average of estimates. The estimates ranged from INR 19.5 billion to INR 20.8 billion.

 

EBITDA margin estimates range from 20.3% to 21.7%. Axis Securities has the highest at 21.7% against 20.3% a year ago, while Equirus Securities has the lowest at 20.3%. Despite robust growth across regions, costs related to the Lannett integration, the dermatology division launch in the US, and higher utilisation of the Kakinada unit are likely to impact margins, according to analysts.

 

Analysts are looking for the company's commentary on the status of the production ramp-up at Kakinada and the resolution of regulatory issues at its arm, Eugia Pharma Specialities Ltd.'s unit-III. Clarity on the biosimilar product line-up is another area to watch.

 

Of the 12 research reports on the company available with Informist, eight have a 'buy' or equivalent recommendation on the stock with a target price of INR 1,796, while three have a 'hold' recommendation with a target price of INR 1,621 and one has a 'sell' with a price target of INR 1,569 per share.

 

The stock has risen 2% since it announced its June-quarter earnings on Aug. 5.

 

At 0926 IST, the company's shares traded at INR 1,646.40 on the National Stock Exchange, up 0.1% from the previous close. 

 

The following are the earnings estimates for Aurobindo Pharma Ltd. for the September quarter from 11 brokerages, in descending order of net profit estimates, in INR billion:

 

Brokerages	Net Sales	Net Profit	EBITDA
Elara Securities (India) Pvt Ltd	102.77	11.98	20.78
ICICI Securities Ltd	97.95	11.72	20.47
Kotak Securities Ltd	96.83	11.49	20.04
JM Financial Institutional Securities Pvt Ltd	96.00	11.37	19.50
Nuvama Wealth Management Ltd	98.02	11.36	20.39
Axis Securities Ltd	92.06	11.33	19.96
Motilal Oswal Financial Services Ltd	96.20	11.19	20.20
360 ONE Capital Market Pvt Ltd	96.32	11.13	--
Equirus Securities Pvt Ltd	98.12	11.05	19.92
Prabhudas Lilladher Pvt Ltd	97.00	10.69	20.17
HDFC Securities Ltd	98.06	10.68	20.40
Average	97.21	11.27	20.18

 

End

US$1 = INR 95.26

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by  Biswadip Mitra

 

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