Aurobindo Pharma Expects Biosimilars To See Significant Opportunity In FY26
The Hyderabad-based bulk and generic drug maker's growth during the third quarter was mainly driven by volume gains, stable demand, and new product launches.
Aurobindo Pharma Ltd. is betting on biosimilars as it sees opportunity in this segment in fiscal 2026 and expects it to translate into margin expansion.
The company is confident of achieving a 20% Ebitda margin, according to Venugopalan Murlidharan, president of EU formulations at Aurobindo Pharma.
"...our new pipeline of approvals will include high-margin new-generation product categories, biosimilars and peptides, etc.," he said during the third quarter concall.
The Hyderabad-based bulk and generic drug maker's net profit jumped 91% year-on-year to Rs 940 crore in the quarter-ended December, according to an exchange filing. That compares with the Rs 878 crore consensus estimate of analysts tracked by Bloomberg.
Highlights From Q3 FY24 Concall
Growth was mainly driven by volume gains, stable demand, and new product launches.
The company received final approval for 16 abbreviated new drug applications and launched 21 products in Q3 FY24.
Gross margin for the quarter was higher, up to 57.1%, as against 55.2% last quarter, mainly due to low raw material costs and a favourable business product mix.
Research and development accounted for 5.4% of the revenue during the quarter. R&D expenditure was higher on account of clinical trial expenses for multiple projects.
The company remains optimistic for the fourth quarter in terms of margin, while growth in oral solids is expected to be strong. It sees positive signals in over-the-counter products and steady continuity in branded oncology injectible businesses.
The company is confident of achieving a 20% Ebitda margin target.
The new pipeline of approvals will include high-margin new-generation product categories, biosimilars, and peptides.
The China plant is fully installed, has received EU Good Manufacturing Practice approval and is expected to start revenue generation in Q1/Q2 of FY25.
The Vizag injectable plant is expected to commercialise in Q1 or Q2 of FY25 or early FY26.
In the next few quarters, the company expects to continue maintaining a run rate of $150 million plus in Revlimid.
The company saw low single-digit price erosion in Q3 for injectable products.
Biosimilars to see a significant chunk of commercial opportunity in FY26. The company expects biosimilars to translate into benefits and expanded margins as a whole.
Shares of Aurobindo Pharma rose 1.65% to Rs 1,019.75 apiece, as compared with a 0.75% fall in the Nifty 50 on Monday at 3 p.m.
