Aurobindo Pharma, one of the  leading 
API  players in the country with a
consolidated net sales of `3,575 crore, gained 27.6 per cent 
on Bombay Stock Exchange (BSE) during last three and half months and
outperformed BSE Healthcare index. The `5 face value share of
Aurobindo closed at `1,077.80 on September 17, 2010 as against `844 on June 1, 2010 with
market capitalization of over `6,275 crore. The scrip reached at its peak level at `1,109.85 on August 23 with
continuous upward movements as against its yearly lowest level of `672.05 on BSE. The BSE
Healthcare index of 21 pharma companies improved only by 6.4 per cent during
this period to 5842.24 points on September 17, 2010.

Despite poor financial performance in first
quarter of current year, the scrip gained support on account of robust product
portfolio, presence in over 125 countries, higher product approvals from
regulatory bodies and focus on research & development. Recently, Aurobindo
entered into licensing and supply agreements with AstraZeneca to supply several
solid dosage and sterile products for emerging markets. It received US FDA
approval for two ANDAs namely, Ampicillin injections for different ranges and
with these approvals its total ANDAs approvals reached at 123.

For the first quarter ended June 2010, Aurobindo
Pharma has suffered a set back in profitability mainly due to provision for
foreign exchange losses. Its consolidated net sales increased by 8.2 per cent
to `922
crore from `853
crore in the corresponding period of last year. However, its net profit
declined sharply by 69.1 per cent to `51.50 crore from `166.57 crore. The fall in
profit impacted its earnings per share which declined to `9.2 from `31 in the last period. The
share capital also increased to `28.23 crore from `26.88 crore as the company issued 7,24,320 equity shares of `5 each for cash at premium of `517 on conversion of FCCBs.
The company provided `41.77 crore for foreign exchange loss as against gain of `57.54 crore in the similar
period of last year.

Aurobindo is implementing expansion programme to
tap future opportunities. It has commissioned commercial production from Unit
VII (SEZ) at Jedchehrla from June 2010 and 
likely to reach capacity utilisation of 50 per cent shortly. This unit
is set to achieve 100 per cent capacity utilisation during 2011-12. The company
also commenced commercial production from its Dayton facility in US. The investments in
these projects will boost profitability in the current year.

The company's consolidated net sales for the
year ended March 2010 rose by 16.2 per cent to `3,575 crore from `3,077 crore in the previous
year. Aurobindo's consolidated formulation sales increased by 32.6 per cent to `1,852 crore during 2009-10
from `1,397
crore and these sales constituted almost 54 per cent of its sales. The domestic
sales increased by 10.9 per cent to `2,434 crore from `2,194 crore. The sales in USA went up sharply by 39.4 per cent to `664.85 crore from `477.06 crore and the same in China went up
by 29.9 per cent to `22.87 crore. Its exports on FOB basis increased by 19.5 per cent to `2,086 crore from `1,747 crore and this worked
out to 64.2 per cent of standalone net sales.

Aurobindo's product portfolio is spread over 6
major therapeutic areas encompassing antibiotics, anti-retrovirals, CVS, CNS,
gastroenterologicals and anti-allergics with over 300 products. .The company
has commercialized over 200 APIs. Its custom research and manufacturing
division viz., Aurosource, is offering comprehensive outsourcing options with
its five R&D centers.

The company's standalone R&D expenditure declined
marginally to `101.48
crore during the year ended March 2010 from `103.23 crore and this worked
out to 3.1 per cent and 3.6 per cent of its standalone turnover. The company
will have to infuse more funds in R&D to achieve faster growth. The company
is now entering into non-penicillin and non-cephalosporin based injectable
market. Further, it is planning to enter into oral contraceptives and
ophthalmic products.

The consolidated net profit of Aurobindo has
taken quantum jump and touched `563.08 crore during the year ended March 2010 from `100.26 crore in the previous
year due to exchange gain of `107.26 crore. Its operating profit before interest, depreciation,
taxation, foreign exchange adjustment and other adjustment went up smartly by
61.4 per cent to `862.13 crore. The company shown a gain of `107 crore in foreign exchange
as compared to loss of `250 crore in the previous year. The company also managed to reduce
interest cost to `67.80 crore as against `83.86 crore. With strong growth in bottom line, its earnings per share
also moved up to `104.04 from `18.65 in the last year.

Currently, promoters are holding 56.15 per cent
equity capital, Foreign Institutions 22.49 per cent, Domestic institutions
11.86 per cent, general public 9.70 per cent and other bodies corporate 2.14
per cent. The company's equity capital stood at `27.86 crore as at the end of
March 2010 and its reserves & surplus amounted to `1,801 crore as compared to `1,214 crore, a smart growth of
over 48 per cent. The company reduced its borrowings to `2,155 crore from `2,333 crore. The return on
equity went up to 34.7 per cent from 8.0 per cent in the previous year.
Similarly, return on capital employed was 21.2 per cent while it was 4.6 per
cent in preceding  year.

Aurobindo has redeemed part of FCCBs issued in
2006 and 2007. As at the end of financial year 2009-10, total 31,782 FCCBs
issued in 2006 were outstanding as against 53,600 FCCBs in the last year.
Similarly, 1,39,200 FCCBs issued in 2007 were outstanding. The FCCBS issued in
2006 are due for conversion into equity shares/redemption on or before May 10,
2011.

The company is managing its business operations
through 13 facilities and 39 subsidiaries worldwide.  Its gross fixed assets increased by 22 per
cent to `2,408
crore from `1,974
crore. Capital work-in-progress reached at `570 crore. The company
acquired and amalgamated Trident Life Sciences Ltd which is setting up facility
for manufacturing injectables at Medak District in Andhra Pradesh.

The company has set a
sales target of US$ 2 billion within next three years. Further, it is focusing
on regulated market as well as emerging markets for future growth.