Aurobindo Pharma, a leading drugmaker, is focusing on sustaining profitability and turnover in the face of rising global uncertainties. According to Chief Financial Officer Santhanam Subramanian, the company’s strategy is centered on scale and diversity, with a goal of expanding into new verticals such as injectables, peptides, and biosimilars. This diversification will help minimize the impact of a potential tariff hike in the US and maintain margins.
Aurobindo has been steadily expanding its presence in the market, starting with a small API business in India, followed by the US, Europe, and other parts of the world. The company is also entering the Chinese market, which is expected to contribute to its growth in 2-3 years.
The company’s diversified portfolio allows it to overcome the risks associated with price erosion, as 10% of its top products account for 20% of its US turnover. Aurobindo does not differentiate between “bread and butter” and high-growth segments, nurturing all verticals independently to ensure consistent contribution to overall growth.
In terms of cash flow generation, Aurobindo is planning to expand its existing projects and open new plants, including a US-based plant and a biosimilar facility. The company’s strong cash flow generation allows it to strategically allocate capital towards new verticals and expansion projects.
Aurobindo’s net debt stands at $84 million, with projections to generate $200-300 million annually. The company has a robust product pipeline, with over 850 ANDAs filed and 150-200 awaiting approval. The new verticals of biosimilars, Eutect, Terany, and Biologics are expected to drive growth in the coming years.
Overall, Aurobindo Pharma is confident in its ability to sustain healthy margins and drive growth through its focus on scale and diversity, robust cash flow generation, and strong product pipeline.