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Aurobindo Q4FY23 PAT down -12.2% at Rs506 crore due to 40.2% spike in raw material costs on supply chain constraints

May 28, 2023

By: BlinkX Research Team

Aurobindo reported 11.4% growth in net sales revenues for the March 2023 quarter on consolidated basis at Rs6,473 crore. Revenues were up 1.03% on sequential basis. US formulations revenues were up 11.6% in Q4FY23 while Europe formulations grew 7.7% yoy. Growth markets showed 51% higher sales, albeit on a very small base. On the positive side, API revenues were up 11.4% in the quarter. For the quarter, Aurobindo spent around Rs411 crore on R&D representing 6.3% of its revenues.

The pressure on profits came from the sharply higher raw material costs by 40% amidst supply chain constraints. Also, the tax burden spiked more than 10-fold on a yoy basis and that also led the net profits lower. That is why net profits were down -12.2% although operating profits were marginally higher. In the quarter, it received final approval for 26 ANDAs including 4 injectable products from the US FDA.

Financial highlights for Mar-23 compared yoy and sequentially

The operating margins tapered yoy from 16.77% to 15.48% due to pressure on raw material costs. Net margins were lower at 7.82% compared to 9.92% in year ago period. Net cash flows from operations in FY23 more than halved to Rs2,387 crore on the back of a spike in inventories in the quarter.