20 April, 2014 11:13 IST
News
India Ratings affirms Aurobindo Pharma at `AA-`
Source: IRIS (16-NOV-12)
Comments  |  Post Comment

India Ratings has affirmed Aurobindo Pharma (APL) Long-Term Issuer rating at ‘AA-'. The outlook is stable. The affirmation reflects India Ratings’ opinion that APL’s revenue visibility over the medium term remains strong driven by new product launches, mainly in the US. This, along with better fixed cost absorption from higher plant capacity use, is likely to lead to an improvement in EBITDA margins from FY13 (year ending March). As a result, financial leverage (adjusted debt net of cash/EBITDA) is likely to see a sustained improvement over the medium term.

Financial leverage deteriorated to 5.0x in FY12 from 2.3x in FY11 due to an increase in debt to Rs 30 billion from Rs 24 billion and a decline in EBITDA margin to 12.4% from 24.9%. The increase in debt was partly due to restatement of foreign currency debt (Rs 3.5 billion). Also, the company reported muted revenue growth of 10.5% yoy in FY12. This is because during FY11 USFDA had sanctioned APL’s Unit 3 and Unit 6 which negatively impacted APL’s export sales to the US during FY12 and also affected the off-take by Pfizer for the US market. The decline in margins is attributed to lower dossier income, one-time incremental expenses and lower absorption of fixed costs on the affected plants.

The increase in APL's revenue and profitability coupled with limited capex is likely to translate into positive free cash flows and a decline in total adjusted debt over the medium-to-long term. Minimal scheduled debt repayments, along with stable working capital, are likely to keep liquidity comfortable over the short term. 

APL expects USFDA to lift all sanctions and also to approve its new Unit 4 during H2FY12. Commencement of exports from Unit 6 and Unit 4 will support revenue growth. To manage revenue growth, APL has set up a distribution network in the US through which it sells majority of its generic formulations. As on end-June 2012, APL’s product portfolio consisted of 152 USFDA approved finished dosage forms (FDFs) and another close to 200 products approved in Europe and South Africa and a long pipeline of products in multiple therapeutic segments.

Shares of the company gained Rs 3.5, or 2.02%, to trade at Rs 177.10. The total volume of shares traded was 514,364 at the BSE (3.54 p.m., Friday).



Aurobindo Pharma Limited   (Q,N,C,F)*


News
Cheslind Textiles standalone quarterly earnings plummet 54.14% - 19-Apr-2014 08:34
Reliance reports marginal increase in Q4 profit - 18-Apr-2014 18:17
CARE assigns ' BBB (SO)' to Jet Airways - 18-Apr-2014 16:17
CARE reaffirms 'BBB+ (Is)' to Ashiana Housing - 18-Apr-2014 16:10
CARE reaffirms 'AA+' to M&M - 18-Apr-2014 16:05
Chakan plant workers stoppage work is not strike: Bajaj Auto - 18-Apr-2014 15:57
FIIs cut stake in SAIL during March quarter - 18-Apr-2014 15:25
FIIs cut stake in Wockhardt during March quarter - 18-Apr-2014 14:46
FIIs cut stake in PNB during March quarter - 18-Apr-2014 14:29
Alstom bags 30 mn Euro contract from BHEL - 18-Apr-2014 13:40
CARE reaffirms 'A-' to Hatsun Agro Product - 18-Apr-2014 13:04
more...
* Q - Quote , N - News , C - Chart , F - Financials
Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type   5mxh75 into this box
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Forums  |   E-mail  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer