MOSL: ANNUAL REPORT THREADBARE (ART) | AUROBINDO PHARMA FY17-Securitisation of trade receivable drives cash flow
​ANNUAL REPORT THREADBARE (ART) | AUROBINDO PHARMA FY17: Securitisation of trade receivable drives cash flow
Aurobindo Pharma’s FY17 annual report highlights a year of moderating growth. EBITDA grew at 8% to INR34.3b. PAT grew faster at 12% to INR23b, aided by lower finance charges. R&D expenses at INR5.9b (3.9% of sales) remained the lowest among peers. FCF turned positive at INR15.4b (FY16: negative INR2.3b) despite high capex at INR16.8b. The improvement was primarily on account of securitization of trade receivables without recourse of INR64.2b (42.5% of sales). Trade receivables securitized as at the year-end stands at INR18.3b; of this, INR7.4b stands as receivable from bank. Gross debt (adj) declined to INR35.5b (FY16: INR51.9b). Rising capital intensity and declining leverage has led to a decline in RoE to 18% (FY16: 20%). Related-party transactions stood at INR5.3b (FY16: INR4.4b), primarily comprising of purchases of INR5.2b, 8.1% of raw material cost (FY16: INR4.3b, 7.1% of raw material cost).
Operating performance muted: Revenue and EBITDA both grew at 8% to INR150.9b and INR34.3b, respectively in FY17 as compared to 5-year revenue CAGR of 26.1% and EBITDA CAGR of 43.7%. EBITDA margin remained constant YoY at 23% despite pricing pressure in key US markets due to low dependency on single product. Gross margin improved 160bp to 57.4%, which was set off by increase in employee and selling expenses.
Aurobindo Pharma is a vertically integrated pharmaceutical group based in India. Co. maintains a product portfolio spread over major product areas encompassing CVS, CNS, Anti-Retroviral, Antibiotics, Gastroenterologicals, Anti-Diabetics and Anti-Allergic with approved manufacturing facilities by USFDA, UKMHRA, WHO, MCC-SA, ANVISA-Brazil for both APIs & Formulations. In addition to Semi-Synthetic Penicillins, Co. has a presence in key therapeutic segments such as neurosciences, cardiovascular, anti-retrovirals, anti-diabetics, gastroenterology and cephalosporins, among others. Co. exports to over 125 countries across the globe.
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