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Business News/ Companies / News/  Aurobindo Pharma plans to complete PLI Penicillin G project worth 2,000 cr by Mar 2024
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Aurobindo Pharma plans to complete PLI Penicillin G project worth ₹2,000 cr by Mar 2024

The plant which was approved under the Production Linked Incentive (PLI) scheme for the promotion of domestic manufacturing of critical key starting materials and active pharmaceutical ingredients (APIs), is expected to have a production capacity of 15,000 tonnes annually.

During the second quarter of FY23, the company spent around ₹276 crore on Research & Development (R&D). It also received final approvals for 9 ANDAs including 5 injectable products from the USFDA.Premium
During the second quarter of FY23, the company spent around 276 crore on Research & Development (R&D). It also received final approvals for 9 ANDAs including 5 injectable products from the USFDA.

Headquartered in HITEC City of Hyderabad, pharmaceutical manufacturing company, Aurobindo Pharma plans to complete Penicillin G (Pen G) plant worth 2,000 crore by March 2024. The company is looking to launch the trial or the pilot batches at the start of October next year. The plant which was approved under the Production Linked Incentive (PLI) scheme for the promotion of domestic manufacturing of critical key starting materials and active pharmaceutical ingredients (APIs), is expected to have a production capacity of 15,000 tonnes annually.

Replying to a query in the recent earnings call, Aurobindo Pharma's Chief Financial Officer S Subramanian said, So, we believe by next September or October, the installation should be over. After that, the trial or the pilot batches will take place starting in October next year onwards. So, our target is to complete the projects by March’24 and it’s our endeavour to advance it," reported PTI.

As per the CFO, of the overall project of $235 million, the majority of it will be put into a desalination plant, the fermentation process, and power blocks, among others. Also, multiple subprojects are being done with purchase orders being issued.

Subramanian revealed that the material of the project is expected to be received in this quarter and the next quarter, while the significant portions of buildings and blocks have been completed.

From the total of 2,000 crore, Subramanian said, Aurobindo has already infused around 500 crore, while the remaining 1,500 crore will be invested in the coming year.

Further, Subramanian revealed that the company's business generated a free cash flow before CAPEX and other items of around $82 million during this quarter. He added that this was spent towards CAPEX and other items, of which, about $31 million was for the PLI Penicillin G project. That being said, so far, the company has pumped in $63 million in the PLI Penicillin G project against the budgeted $235 million.

In Q2FY23, Aurobindo posted a net profit of 409.4 crore down by 41.2% from 696.7 crore in Q2FY22. Revenue from operations stood at 5,739.4 crore lower by a marginal 3.4% from 5,941.9 crore in Q2 of the previous fiscal. During the second quarter of FY23, the company spent around 276 crore on Research & Development (R&D). It also received final approvals for 9 ANDAs including 5 injectable products from the USFDA.

In its audit report filed on exchanges on August 12, K. Nithyananda Reddy, Vice-Chairman and Managing Director of the company said, "Our continued focus on Biosimilar, R&D, innovation, and increasing manufacturing capacity will enhance our product offerings, in various markets. We are confident that, the right measures and growth-led strategies will help improve our profitability and margins over the medium to long term."

On Monday, Aurobindo shares closed at 463.85 apiece down by 1.05% on BSE. The company's market cap is around 27,178.76 crore.

Aurobindo's robust product portfolio is spread over 7 major therapeutic/product areas encompassing CNS, Anti-Retroviral, CVS, Antibiotics, Gastroenterological, Anti-Diabetics, and AntiAllergic, supported by a strong R&D set-up. The company is marketing these products globally in over 150 countries.

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Published: 21 Nov 2022, 06:29 PM IST
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