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#AurobindoPharma Q3 FY22 concall highlights 💊💊

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1. Revenues for the quarter stood at ₹6002 Cr (1% decline YoY).

2. EBITDA was at ₹1016 Cr (20% decline YoY) for the quarter. EBITDA margins for the quarter were 16.9%. PAT stood at ₹604.3 Cr (80% decline YoY).

3. Revenue from formulations was ₹4992 Cr (12% decline YoY).

4. Formulations contributed about 83% of total revenues. Revenue from the API business stood at ₹1010 Cr (48% growth YoY) and contributed about 17% of revenues.

5. The revenues from the US formulation business declined by 4.4% YoY to ₹2745.2 Cr and accounted for 45.7% of revenues.

6. During the quarter, they filed 5 ANDAs including 3 injectables. They also received approval for 4 ANDAs including 1 injectable.

7. The company has launched 7 products during the quarter including 4 injectables.

8. Europe revenue in Q3 FY22 posted a growth of 1.4% YoY to ₹1694.3 Cr. Europe Formulations accounted for 28% of revenues.

9. Revenue from Growth Markets formulations was largely flat on a YoY basis and grew by 2.8% QoQ to ₹397 Cr and accounted for 6.6% of revenue. ARV business revenue for Q3 FY22 stood at ₹155.7 Cr, a decrease of 64.9% YoY and improved 7.4% QoQ, accounting for 2.6% of revenues.

10. R&D expenditure for the quarter stood at 6.6% of the revenue.

11. Raw material costs increased by 4% on average during the quarter and the freight costs increased more than 20% QoQ. .

12. Out of the total decline in gross margins, about 1.25% is due to change in product mix and the rest is high raw material costs.

13 .They are going to enter the Domestic Branded Formulations market - most likely through an inorganic opportunity. They currently have strong cash flows and will be receiving another $300 million cash flow in the next 4-5 quarters.

14. The branded generics business in India is changing where you don’t need to hire thousands of market reps anymore. Their goal is to reach ₹1000 Cr sales within 1 year of entering the domestic market.

15. They received a repeat warning letter for the Unit 1 plant which they will try to resolve in the next one year. They also have a US plant which has received a repeat warning letter since it is a 68 year old building. It is a small plant with $2.5 million sales and it is

loss making. They are considering shutting down that plant. There is an audit ongoing in the Unit 5 sterile API plant.

16. All their plants are due for inspection now as USFDA has not been conducting in-person audits for close to 2 years.

17. They have scheduled launches of 10-15 products for FY23. They also have a significant number of launches for FY24 which will help them reach revenues of $650-700 million in FY24 for the injectables business.

18. Under the PLI scheme, they will be manufacturing 15,000 tons of Penicillin G at Kakinada. The land has been acquired and the work is ongoing, the total capex required is going to be ₹1850 Cr and they have already spent close to ₹500 Cr.

It was scheduled to start in FY23 but they have received an extension from the government upto end of FY24 due to COVID related issues.

19. They have filed their second oncology biosimilar with the European Medicine Agency. They have 3 more biosimilar in Phase 3 clinical trials and are looking to file one of them which is an oncology monoclonal antibody in the next financial year.

20. There may be some raw material issues from China in the coming quarter. Due to the Winter Olympics they may face some controls on manufacturing which can cause shortages.