Aurobindo Pharma (AUROPHARMA)
Why the stock moved
Turnaround story gaining traction with US business stabilizing and European operations showing strong growth of 18%.
In-depth analysis
Aurobindo is successfully executing its turnaround strategy after facing challenges in US operations. European formulations grew 18% driven by market share gains and new launches. US business showing sequential improvement with improved compliance and product approvals. Integration of acquired Sandoz oral solid portfolio proceeding well.
Key highlights
- Europe Growth: 18% YoY growth driven by new launches and market share gains
- US Stability: Sequential improvement with 6% growth in injectables
- Compliance Progress: Resolved major warning letters, 3 sites cleared
- Sandoz Integration: Acquired portfolio contributing $180 million annually
- Margin Recovery: EBITDA margin improved to 19.5% from 16% trough
Outlook
Management targets mid-single digit revenue growth in US with focus on complex generics and biosimilars. Europe expected to continue double-digit growth. API business, which contributes 25% of revenue, showing pricing recovery. Aim to achieve 21-22% EBITDA margin over next 2 years through operational efficiency.
Risk factors
Legacy regulatory issues still being resolved. Price erosion in US oral solids remains a challenge. Working capital intensive business model. Integration execution risks from Sandoz acquisition.