Moneycontrol
Feb 15, 2017 04:11 PM IST | Source: Moneycontrol.com

Buy Aurobindo Pharma; target of Rs 917: Khambatta Securities

Khambatta Securities is bullish on Aurobindo Pharma has recommended buy rating on the stock with a target price of Rs 917 in its research report dated February 13, 2017.

Buy Aurobindo Pharma; target of Rs 917: Khambatta Securities


Khambatta Securities' research report on Aurobindo Pharma


Aurobindo’s revenues grew 12.6% y-o-y and 3.4% q-o-q to Rs 39,141 mn in 3Q FY17 marginally above our expectations. Revenue was driven by 12.0% y-o-y growth in US formulations and 10.3% growth in Europe formulations business while ARVs grew 12.0% y-o-y during the quarter. API sales grew 11.6% y-o-y during the quarter.


Outlook


We assume a target EV/EBITDA multiple of 13x for FY 2018 EBITDA, to arrive at a target price of Rs 919 per share. Aurobindo’s DCF valuation is Rs 914 per share. Consequently, using a weighted average methodology we arrive at a share price of Rs 917, generating a 38.8% upside potential in the medium term.

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