Shares of Aurobindo Pharma slipped 7 per cent to hit an over two-year low of Rs 457.20 on the BSE in Monday’s intra-day trade after the company reported a weak set of numbers in the September quarter (Q2FY23). The stock of the drug maker hit its lowest level since April 2020.
The company’s consolidated net profit in Q2FY23 came 41 per cent lower on a year-on-year (YoY) basis at Rs 409 crore.
The company’s revenue from operations declined 3.4 per cent YoY to Rs 5,739 crore in Q2FY23 as against Rs 5,942 crore in the year-ago period. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin contracted to 14.6 per cent from 20 per cent.
US price erosion continued with US injectable and ex-injectable businesses de-growing 28 per cent YoY and 15 per cent YoY, respectively.
The company said the second quarter performance was subdued mainly due to the macro-environment factors and higher competitive intensity for some products in the US.
The firm saw dismal performance undone by US (acute pricing pressure) and Europe (INR appreciation). Margins were also below par due to unfavourable products mix and higher other expenditure despite having vertically integrated model, said ICICI Securities in a note.
Meanwhile, in the past three trading days, the stock of the drug company has tanked 16 per cent after the arrest of the company’s whole time director / promoter group P. Sarath Chandra Reddy. However, Aurobindo Pharma said the arrest of Reddy is not in any way connected with the operations of the company or its subsidiaries.
The company said it has learnt that P. Sarath Chandra Reddy has been arrested by Enforcement Directorate (ED) relating to the transactions done in his personal entities and it is not related to the operations of Aurobindo Pharma.
“He is overseeing operations of procurement of engineering items, logistics and IT and these departments are headed by senior professionals and also the same are now allocated to other wholetime directors. hence, impact on the operations in those areas is very minimal,” the company said in exchange filing.
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