Aurobindo Pharma Ltd.    
10 Aug 2017
Aurobindo Pharma says pricing pressure is bottoming out in earnings call, as Jhunjhunwala questions management

Aurobindo Pharma management, in its earnings call with investors and analysts today morning, said an item of note: it acknowledged that price erosion was in the double-digit % YoY, rather than single digits which it had expected. Quarterly price erosion however was flat, suggesting that the fall in price has been arrested going forward.

The management received questions from investor Rakesh Jhunjhunwala, who owns over 1.12% of the company.  Jhunjhunwala had praised the company's performance "in difficult circumstances", with the FDA pushing for greater competition in the US generics market to bring prices down. AuroPharma management, responding to his questions on pricing, said that they don't expect drug prices to see a downside of more than 5% in the coming quarters.

The company's Europe business has grown strongly,  crossing into double digits in EBITDA margins. This however didn't arrest the slide in the firm's overall numbers - US generics sales have been flat, and revenues from API formulations are also down. Aurobindo is however, moving aggressively on complex formulations, such as the gRenvela tablet it recently launched and received approval for. The company did not include Renvala sales in Q1 earnings. 

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