Aurobindo Pharma up 8% on Q1 nos, injectable biz demerger

Moneycontrol Bureau

Aurobindo Pharma shares gained nearly 10 percent in initial trade Monday on strong Q1 earnings and demerger of injectable business.

The pharmaceutical firm has turned profitable with first quarter consolidated net of Rs 18.6 crore as against loss of Rs 128.9 crore in a year ago period. Consolidated net sales jumped 42 percent Y-o-Y to Rs 1,699.6 crore during the quarter.

The board of directors of the company approved spin-off of injectable business. "In order to strengthen and provide focused growth to the injectable business and to leverage strategic opportunities, the Board considered the option of spin-off of the injectable business to a wholly owned subsidiary as a going concern," the company said in its filing.

The board also gave approval for buying 57 percent stake in Silicon Life Sciences, which is engaged in manufacture of non-sterile penems, from its existing shareholders of 49 percent from VVR group and 8 percent from Trident Chemphar. Post this acquisition, the equity holding of the company would increase to 75 percent, thereby making Silicon a subsidiary of the Company, says Aurobindo.

The company will also buy 60 percent stake in an upcoming manufacturing facility (under construction) being established by Celon Laboratories to manufacture Hormonal and Oncology products for a total cash consideration of Rs 15.6 crore.

At 10:22 hours IST, the stock gained 7.36 percent at Rs 172.90 on the BSE.