From ₹397 to ₹1,081: This largecap pharma stock surges 170% in 10 months

Homegrown multinational drug major Aurobindo Pharma has seen stellar growth in its share price in the calendar year 2023. The largecap pharma stock has outperformed the BSE benchmark Sensex and BSE Healthcare index in terms of returns in the last one year, driven by strong financial performance, strong sales across key markets of the United States, Europe, and even in the antiretroviral (ARV) formulation segment.  

Shares of Aurobindo Pharma have zoomed more than 170% in the last ten months, rising from its 52-week low of ₹397.30 touched on February 3, 2023, to scale a new all-time high of ₹1,081.45 in intraday today.

With a market capitalisation of ₹61,831 crore, the healthcare heavyweight has given more than 140% returns in the last one year, while it surged 141% in the calendar year 2023. In comparison, the BSE Sensex and BSE Healthcare index rose 15% and 31%, respectively, in the past 12 months; and 17% and 32%, respectively, in the calendar year 2023. In the past six months, Aurobindo Pharma shares rose 55%, while it added 18% in three months. The counter gained nearly 5% in a month and more than 2% in a week.

Early today, Aurobindo Pharma shares opened marginally higher at 1037.10 against the previous closing price of 1032.70 on the BSE. Extending opening gains, the pharma stock surged 4.7% to touch a new life-time high of 1081.45 in intraday trade after the company informed exchanges that the U.S. drug regulator has issued an establishment inspection report (EIR) for Tirupati facility, located in Andhra Pradesh.

“The U.S. Food and Drug Administration (FDA) had conducted an inspection at the Unit IV, a Formulation manufacturing facility, of APL Healthcare Limited, a wholly owned subsidiary of the Company, situated at Menakuru Village, Naidupeta Mandal, Tirupati District, Andhra Pradesh, from September 13 to September 19, 2023,” it says in a BSE filing.

As per the exchange filing, the U.S. FDA has now classified the Tirupati unit as "Voluntary Action Indicated" (VAI), which is the second-best classification that a plant can get from the American drug regulator. This classification means that objectionable conditions or practices were found during the inspection but the agency is not ready to take or recommend any administrative or regulatory action.

Last week, Aurobindo Pharma informed exchanges that it completed acquisition of marketing and manufacturing related authorisations from Viatris Inc and Pfizer Inc. In September this year, the company had unveiled its plan to foray into the Indonesian market by acquiring 15 formulations brands from Viatris Inc and Pfizer Inc for a cash consideration of $48 million (around ₹398 crore).

On November 29, 2023, the drug maker had also received approval from the U.S. health regulator to market a generic medication for treating human immunodeficiency virus (HIV-1) infection. The company received final approval to manufacture and market Darunavir Tablets, 600 mg and 800 mg, which is bioequivalent and therapeutically equivalent to the reference listed drug (RLD), Prezista Tablets, 600 mg and 800 mg, of Janssen Products, L.P.

For the second quarter ended September 30, 2023, Aurobindo Pharma reported a 85% year-on-year rise in consolidated net profit to ₹757 crore, while revenue stood at ₹7,219.4 crore, up 25.7% from the year-ago quarter. Region wise, revenue from U.S. formulations (excluding Puerto Rico) rose by 35.7% YoY to ₹3,385 crore, while Europe formulation’s revenue was up 16.7% YoY to ₹1,769 crore. Growth markets posted a 24.7% YoY rise in revenue to ₹564 crore.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)