Aurobindo Pharma Limited — Q2 FY25
Aurobindo Pharma delivered a steady Q2 FY25 with revenue of INR 7,796 crore (+8% YoY) and EBITDA margin of 20.1%, despite higher R&D costs and penicillin G ramp-up losses.
bullish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
83%Questions answered1Evaded / deflected12Questions auditedMixedNumbers vs filing
Answered
High priority
Progress on penicillin G commercial batches and yield update.
Asked by Kunal Dhamesha, Macquarie Group
Provided specific batch numbers and timeline for breakeven.
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Question
Where are we in terms of what progress are we making in terms of taking commercial batches? And on the yield front, you suggested that you would provide some updates in quarter three call.
Santhanam Subramanian, CFO
We are now taking the commercial batches. We have taken around nearly 35 batches in Q2. Now, we have accelerated the entire thing, and we should be doing not less than 35-40 batches for the current month alone.
Evasive
Medium priority
Volume growth quantification in U.S. business.
Asked by Kunal Dhamesha, Macquarie Group
Did not quantify volume growth despite direct request.
no specific percentage givenvague language
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Question
On the volume growth that we are seeing, can you maybe quantify what type of volume growth is it like in low-single digit range or mid-single digit range on volume growth?
Satakarni Makkapati, Director
U.S. business has grown in terms of volume. We have touched certain good milestones this quarter. And there has been growth quarter to quarter and, of course, on an annual basis.
Answered
High priority
Reason for specialty injectable sales decline and outlook.
Asked by Kunal Dhamesha, Macquarie Group
Attributed decline to both lumpy product and supply issues, gave outlook.
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Question
The specialty injectable sales, which has kind of declined 11% roughly from $102 million to $81 million. So one, what are our expectations from quarter three? And also, you alluded to the supply chain issues.
Yugandhar Puvvala, CEO Eugia
It is a combination of both because, obviously, we cannot really do quarter-to-quarter management of that lumpy product. So Q2 and Q3 is expected to be lower for the sterile product, whereas half of it is mainly related to Unit 3 supply issues.
Partial answer
Medium priority
Reason for higher R&D cost and split by segment.
Asked by Shyam Srinivasan, TVS Capital Funds
Explained drivers but did not split by segment as requested.
no segment split provided
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Question
First is on the R&D cost, INR 410 crore, kind of jumped up like 80-100 basis points. So I just want to understand what is driving the higher R&D. And you could also split us out maybe based on the different segments.
Satakarni Makkapati, Director
The majority of these costs are a result of the phase III clinical trial expenditure for four of our biosimilar products. We have denosumab, omalizumab, an oncology product, and an ophthalmic product.
Answered
Medium priority
Reason for high effective tax rate and full year guidance.
Asked by Shyam Srinivasan, TVS Capital Funds
Explained reason and gave full year ETR guidance of around 30%.
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Question
Subbu's ETR for the quarter was kind of high. So is there something that's happening there that we need to be aware of? If you could give us a full year ETR guidance as well.
Santhanam Subramanian, CFO
The R&D costs are being incurred in a company called CuraTeQ, which is a 100% subsidiary. We are not taking the deferred tax asset on the expenditures as of today being a little bit conservative. That is the reason you can see the effective tax rate has gone up.
Partial answer
High priority
Recovery timeline for generic injectables and Eugia guidance.
Asked by Damayanti Kerai, HSBC
Gave qualitative recovery but did not quantify compared to predisruption level.
no specific recovery number given
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Question
In terms of numbers, if you can say how much recovery we have seen compared to predisruption level, and should we assume it to normalize, say, by fourth quarter? And do you maintain your guidance for global Eugia sales for this year?
Yugandhar Puvvala, CEO Eugia
We have increased our sales from Q1 to Q2 and expect Q3 and Q4 to be even better from a pure generic injectable basis. So we are bang on in terms of Q4 is expected to be the best quarter.
Answered
High priority
Timing of gross margin improvement from penicillin G plant.
Asked by Neha Manpuria, Bank of America
Provided loss figure and breakeven timeline, clarifying contribution timing.
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Question
On the pen G plant, now that we accelerate the ramp-up, is it fair to assume that the captive consumption and the gross margin improvement should be meaningfully higher in the second half, or would that be visible probably mostly in fiscal 2026?
Santhanam Subramanian, CFO
We have incurred around INR 80 crore loss, which is expected to come down partly in the coming quarter and should be fully break-even by March quarter. So you can start seeing the contributions from this plant from next year onwards.
Answered
High priority
Growth drivers for European business from $900M base.
Asked by Neha Manpuria, Bank of America
Listed specific growth drivers including peptide launches.
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Question
From this $900 million base, if I think about fiscal 2026 and 2027, what do you think are the growth drivers that I should build in for the European business scaling up from the current level?
Venugopalan Muralidharan, CEO Europe Formulations
The growth drivers for the subsequent two financial years are going to be more launches. Some of them are peptides, day-one launches. We are gearing up for three to four products there minimum.
Answered
High priority
Whether Unit 3 impact was averted in Q2 and outlook.
Asked by Tarang Agrawal, Old Bridge Asset Management
Confirmed impact continued in Q2 and gave current status.
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Question
If we look at Unit last quarter, which is Q1 of FY 2025 and Q4 of FY 2024, we were impacted by anywhere by about $15 million-$20 million on a quarterly basis because of Unit 3. It was widely anticipated that this quarter, much of that impact will be averted. So has that been averted to a large extent?
Yugandhar Puvvala, CEO Eugia
In fact, Q2, we continued to have similar issues like Q4 and Q1 current. But now we are back to the original levels. But Q2 also, I have taken the impact of supply chain.
Answered
Medium priority
Opportunity in peptide business and GLP-1 capacities.
Asked by Nitin Agarwal, DAM Capital
Provided details on current capacity and expansion plans.
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Question
On the peptide business, I think we heard some comments in the presentation. If you can just probably give us some more color on the thought process... what kind of opportunity do we see here for both the segments?
Satakarni Makkapati, Director
We have about five manufacturing lines which can do gram quantities to a kg quantity of the product. We have initiated constructing a phase I of the new GLP facility, which I believe would be ready by the end of next year.
Answered
Medium priority
Plans and growth for branded specialty U.S. business.
Asked by Amey Chalke, JM Financial
Provided revenue range and stated no major changes expected.
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Question
On the branded specialty U.S. business, if management can highlight plans here or any milestones in the near term for this business and what growth should we assume?
Swami Iyer, CEO Aurobindo Pharma USA
We have given an indication earlier that Acrotech is studying the $25 million-$30 million range that we are talking about. We don't see any immediate change to it. We will be steadily maintaining the business, or there could be some minor improvements.
Answered
High priority
Whether 20% margin is a sustainable base going forward.
Asked by Amey Chalke, JM Financial
Gave explicit margin guidance of 21%-22% and better H2.
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Question
Despite that, our margins have been a bit healthy, around 20%. Is there anything which management wants to highlight or supposedly wants to highlight? Should we consider this 20% as a base going ahead?
Santhanam Subramanian, CFO
Even though the YTD structural margin is around 20.7%, we are still maintaining our cadence of around 21%-22%. Right? We expect the second half will be better than the first half, including all businesses.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| YTD structural margin 20.7% | 20.7% | 20.1% | Matches filing |
| Margin guidance 21%-22% for full year | 22% | 20.1% | Overstated vs filing |
| Specialty injectable sales declined from $102M to $81M | 81 | 7,796 | Understated vs filing |
| European business revenue on course for $900 million in FY25 | 900 | 7,796 | Understated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.