Thursday, June 19, 2008

Stock Idea: Aurobindo Pharma

Fundamentally a very sound company, the financial performance has been, as expected, very good.
Net sales of the company rose 8.25% at Rs.2435.90 crores. Operating expenses grew consistently: EBITDA was up 24% at Rs.435.36 crore. PBT was up 41% at Rs.291.75 crore. And despite an over 12 times rise in taxation outgo, the company posted a PAT of Rs.238.48 crore; a 19% rise over previous year.
The company reported a 45% rise in formulation sales and this, to a large extent, helped shore up the profit margins. Despite pressure in generic prices, its sales to US was at US $ 59 million and in Europe at US $ 50 million. The price of Pen-G remained stable and even its operations in China stabilized during the year.
The best part is that company’s overall borrowing during the year stood at RS.1847 crores, which is down from Rs.2078 crore in FY07.
As on 31/3/08, 67 ANDAs have been approved in USA including 18 tentative approvals. It has till now launched 33 products in the USA market. FOB value of exports is Rs.1339.49 crores as against Rs.1096.83 crore in FY07.
The company’s “other income” stood at a significant Rs.94.25 crore in FY08. Of this, Rs.85.50 crore came in via exchange fluctuation gain on account of FCCB’s.
Pharma stocks are once again in the limelight on the bourses. The recent sellout of Ranbaxy has stoked speculative forces on most of the other front line pharma stocks. Aurobindo has also been moving up significantly and is currently at Rs.330. Stay invested, it’s a sound company.


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