Aurobindo Pharma stock falls over 6% post Q1 earnings; check what brokerages say

Aurobindo Pharma share price fell over 6% in Thursday's session, a day after the company published its April-June quarter results.

The drugmaker reported a 22.8% YoY growth in its consolidated profit to Rs 780.7 crore in the June quarter against Rs 635.7 crore in the year-ago period.

Revenue from operations increased by 8.8% YoY at Rs 5,924.8 crore against 5,444.6 crore registered in the year-ago period. Company's US formulation business also showed a 15.6% YoY growth to Rs 3,107.1 crore, as against Rs 2,688.4 crore, accounting for 52.4% of the consolidated revenue, the company said.

Despite the pharma company reporting earnings above analysts' estimates, shares of Aurobindo Pharma opened at its earlier closing price of Rs 934 on BSE and later touched an intraday low of Rs 875.2, falling 6.3%. The stock has fallen almost 7% in the last 3 days.

Stock price of Aurobindo Pharma has jumped over 100% in the last nine months. It has also touched an intraday high of Rs 892.25. Aurobindo Pharma shares trade higher than 20, 50, 100 and 200-day but lower than 5-day moving averages. Market capitalisation of the firm stood at Rs 51,984.47 crore as of today's session.

Company's earnings before interest, tax, depreciation and amortisation (EBITDA) grew 9.7% YoY to Rs 1,257.4 crore, while its margin expanded 10 bps YoY to 21.2% in Q1FY21 from 21.1%.

"Amid challenging times, we have started the financial year by reporting a healthy performance. We have ensured the business continuity without compromising the safety and wellbeing of our employees," said Aurobindo Pharma Managing Director N Govindarajan.

Motilal Oswal has a 'BUY' rating on the pharma stock, after adding that Aurobindo's results were operationally in-line with the estimates.

ICICI Securities has also given add rating to Aurobindo Pharma with a target price of Rs 1025. "Considering strengthening the balance sheet and improving US business environment, the brokerage has raised earnings estimates of the pharma major by 1-2% to factor in lower interest cost and also raised target P/E(x) to 16x from 14x. Key downside risks include regulatory hurdles, currency volatility and delay in US launches," the brokerage added.

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