Aurobindo Pharma Q1 FY26: Revenues Grow, Profit Slips

Key Highlights

Revenue rose ~4% YoY to ₹7,868 crore from ₹7,567 crore a year ago, led by strong Europe and ARV growth. Net Profit declined 10% YoY to ₹824 crore (vs ₹919 crore), missing analyst estimates (₹940 crore). EBITDA edged down ~1% YoY to ₹1,603 crore; EBITDA margin contracted from ~21.4% to ~20.4%. Business Trends & Segment Performance US formulations revenue slid ~1.9% YoY to ₹3,488 crore amid destocking and seasonality. European formulations surged ~18% YoY to ₹2,338 crore, while ARV (antiretroviral) sales jumped ~55%. Growth markets overall rose ~8.8%, but API segment revenue declined ~16% YoY to ₹916 crore. Cash & Capital: Interim Dividend Announced Aurobindo declared an interim dividend of ₹4 per share (400%), record date set as Aug 8 and payout by Aug 21. What Went Wrong Slower US and API business drag profits despite overall revenue growth. Margin decline reflects mix shift and cost pressures. EBITDA margin slipped ~100bps. Q1 missed estimates on both bottom-line and margins. Positives to Note Strong execution in Europe and ARV space offsets weakness in the US and API. Disciplined operations and recent US acquisition are expected to strengthen long-term growth potential. A high majority of analysts (23 out of 29) continue to rate the stock a ‘Buy’, expecting ~26% upside to consensus ₹1,378 average price target. Final Take Aurobindo’s Q1 shows a mixed picture: steady topline growth balanced by profit contraction and margin compression. The decline in US and API business is offset by robust performance in Europe and ARV, but operational pressures remain. The interim dividend adds shareholder value for now. Long‑term view: Focus on improvement in US formulations, API turnarounds, and margin stabilization in H2 before re-applying conviction.