(Reuters) – Indian drugmaker Aurobindo Pharma reported a lower third-quarter profit on Thursday, as a spike in expenses more than offset strong demand for its generic drugs.
The company’s consolidated net profit fell 10% to 8.46 billion rupees ($96.6 million) in the quarter ended Dec. 31.
Its total revenue from operations climbed 8.5% to 79.79 billion rupees.
However, its total expenses also jumped 11% to 69.38 billion rupees
For further earnings highlights, click.
KEY CONTEXT
Significant revenue at most of India’s generic drugmakers comes from the U.S. and fierce competition in North America’s generic drugs market has been weighing on the firms’ margins.
Among Aurobindo’s rivals, Sun Pharma and Cipla beat third-quarter profit estimates, while Dr Reddy’s missed expectations. However, all three companies saw muted growth in their key North American market.
PEER COMPARISON
Estimates (next 12 Analysts’ sentiment
months)
RIC PE EV/EBI Revenue Profit Mean # of Stock to Div
TDA growth growth rating* analysts price yield
(%) (%) target** (%)
Aurobindo Pharma 15.54 9.02 10.26 21.14 Buy 25 0.77 0.38
Ltd
Alembic 22.37 14.26 10.96 25.45 Buy 9 0.78 1.25
Pharmaceuticals Ltd
Cipla Ltd 23.09 14.56 8.21 5.85 Buy 33 0.89 0.90
Zydus Lifesciences 21.30 14.39 7.71 4.01 Hold 28 0.89 0.31
Ltd
* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER TO DECEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.6130 Indian rupees
(Reporting by Kashish Tandon in Bengaluru; Editing by Shailesh Kuber)
