Aurobindo Pharma reported a 10 per cent YoY profit decline in Q1 FY26. But Elara Capital has maintained a ‘Buy’ call on the pharmaceutical company.
Here are the key observations by Elara Capital on Aurobindo Pharma’s Q1 results and future outlook.
Strong product pipeline
Elara Capital observes that Aurobindo Pharma has 14 biosimilars in the pipeline. The company has also filed 3 biosimilars for approval from European Union regulators. Additionally, the company will start filing for biosimilar approvals with the US Food and Drug Administration in FY26.
Furthermore, Elara Capital says that four other biosimilars of the company, namely bAvastin, bProlia, bXolair and bLucentis, are in phase 3 for the European Union and RoW. Additionally, Aurobindo Pharma is heavily investing in biologics CMDO.
The recently announced partnerships with companies such as Merck Sharp & Dohme also signal a strong growth outlook for the company.
Penicillin-G production expectations
Penicillin-G, an antibiotic medicine, production cost has hit Aurobindo Pharma’s EBITDA in the Q1 FY26. The drug’s production facility was briefly shut down due to a fire incident and is yet to catch up to full production capacity. The facility is expected to commence ramped-up operations by September. The facility is expected to produce about 6000 to 8000 tons of penicillin in FY26, giving a big push for the company’s revenue.
EU business growth outlook
Aurobindo Pharma’s EU business continued its growth trajectory in Q1. The segment saw a 9 per cent YoY growth in the quarter. The company’s management expects that the EU business will continue ot grow in FY26 at an 8 to 9 per cent growth rate.
While the EU business shows signs of growth, the US business remains a worry for Aurobindo Pharma. The US sales were already down 4 per cent YoY in Q1FY26, the latest tariffs announcement and increasing commerce tension between India and the US remain key worries for the company’s future US business.