Aurobindo Pharma share price surged 10.6 percent intraday Tuesday after the company said it is less worried about pricing pressure in the US and is confident about FY18 growth despite weak Q4 earnings.
The healthcare company, in its conference call, said price erosion in the US is likely to continue and that may be 7-8 percent. This is far less than its peers that expect in double digits.
Intensity of pricing pressure is expected to taper off in next few quarters, it believes.
It has strong portfolio of products and doesn't have dependence on any single product, Aurobindo said, adding it does not expect any pricing pressure on portfolio.
The company is confident of growth in FY18 YoY.
Its two units were inspected by US Food and Drug Administration; out of which unit 10 cleared without any observations while unit 4 received seven observations that are not related to data integrity, the company said.
Aurobindo is also awaiting establishment inspection report for 5-6 units.
Consolidated net profit of the company declined 4 percent year-on-year to Rs 532.4 crore and revenue slipped 2.8 percent to Rs 3,641.6 crore in the quarter ended March 2017.
Operating profit during the quarter was down 16.2 percent at Rs 721.2 crore and margin contracted by 320 basis points to 19.8 percent compared with same quarter last fiscal.
"We have registered 8 percent YoY revenue growth in FY17 despite a challenging environment in select markets. We continue to invest in building a differentiated and speciality product portfolio, which will sustain the growth momentum for the future," N Govindarajan, Managing Director, Aurobindo Pharma said in its BSE filing.
Aurobindo Pharma was the lead gainer in the NSE Pharma index which rallied nearly 2 percent. Apart from Aurobindo Pharma, rally in the index was led by gains in Glenmark Pharma which rose 2 percent, followed by Lupin which rallied 2.01 percent, and Dr Reddy's Laboratories which gained 2.2 percent in morning trade.
At 09:49 hours IST, the stock was quoting at Rs 544.30, up Rs 30.60, or 5.96 percent on the BSE.Posted by Sunil Shankar Matkar