Detailed Narrative
Strong Financial Performance in Q4 and Full Year FY25
Aurobindo Pharma achieved its highest-ever revenues and EBITDA for both Q4 and the full fiscal year 2025. For FY25, revenues reached ₹31,724 crores, with an EBITDA of ₹6,605 crores, translating to a 20.8% margin. Q4 FY25 saw revenues of ₹8,382 crores and EBITDA of ₹1,792 crores, with a robust 21.4% margin. Gross margins improved by 65 basis points quarter-on-quarter to 59.1%, driven by a favorable product mix and benign raw material prices, despite one-time📎 expenses exceeding ₹105 crores.
Robust Growth Across Key Business Segments
The formulation business, contributing 87% of total revenue, grew 12% year-on-year to ₹7,313 crores in Q4 FY25, primarily fueled by strong performance in the US and Europe. US formulation revenue increased 13% year-on-year to ₹4,072 crores (US$ 470 million), while European formulation revenue grew 17% year-on-year to ₹2,147 crores (€236 million). The API business also saw a 5% year-on-year growth to ₹1,069 crores in Q4 FY25, driven by higher volumes and improved asset utilization. The ARV business notably grew 29% year-on-year to ₹308 crores (US$ 36 million).
Strategic Capacity Expansion and New Market Entry
Aurobindo is actively expanding its manufacturing footprint, with formulation capacity now exceeding 60 billion units. The China OSD plant, commercialized this year with 2 billion units capacity, is expected to contribute revenues in FY26 and aims for break-even or slight profitability. The US-based OSD plant at Dayton is also slated for commercialization during FY26, while the Raleigh facility is expected to be fully operational soon to include transdermal and respiratory products. The company is also developing multiple respiratory products, partnering with a global pharma major in FY25.
Biosimilars and Complex Products: Long-term Growth Drivers
The company has made a significant cumulative investment of over US$ 400 million in its biosimilar business. Following recent European approvals and a positive opinion for Dazublys, Aurobindo plans to commence supplies from Q2 of the next fiscal year. Management projects double-digit revenue growth for the biosimilar business starting next fiscal, with 2028 anticipated as the inflection year. By 2030-31, the biosimilar business is expected to generate US$ 250-400 million in revenues from approximately seven products in regulated markets.
Pen-G Plant Incident and PLI Scheme Update
A fire incident at the Penicillin-G facility in Kakinada resulted in an estimated impact of ₹4 crores and a temporary halt in operations. Rectification efforts are complete, and the company is awaiting regulatory approvals from the PCB to resume production. Management emphasized that running the PLI-supported plant at full capacity is crucial for achieving profitability, noting that PLI facilities contributed a negative ₹30 crores to EBITDA in FY25. Discussions around minimum import prices for critical raw materials are ongoing, which could potentially benefit the project.
Improved Capital Structure and FY26 Outlook
Aurobindo Pharma significantly strengthened its capital structure, moving from a net debt of US$ 84 million as of December 31, 2024, to a net cash surplus of US$ 42 million by March 31, 2025, driven by improved working capital. The average finance cost for the period was 5.5%. For FY26, the company targets high single-digit revenue growth (excluding transient📎 products) and aims to maintain current EBITDA margins. While injectable growth is expected to be muted in FY26 due to Eugia-3 remediation, FY27 is projected to be a strong year with significant launches and settlement-based products.