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Buy Aurobindo Pharma, target Rs 914: Sharekhan
Sharekhan research has maintained buy rating on Aurobindo Pharma with target price of Rs 914. Based on our calculations, we estimate annual revenues and profits of USD 20 million and USD 5 million respectively in FY2009.
Sharekhan research has maintained buy rating on Aurobindo Pharma with target price of Rs 914, in its December 19, 2007 report. "Based on our interaction with companies already present in the market, we believe the generic product is currently available at 65-70% of the value of the branded product. We believe Aurobindo will be able to capture at least a 10% share of this market in FY2008 and around 15% in FY2009. The company is aiming to launch the product within the next ten days and hence we have assumed revenues for only three months of the year in FY2008. Based on our calculations, we estimate annual revenues and profits of USD 20 million and USD 5 million respectively in FY2009, which would translate into incremental earnings of Rs 3.20 per share for Aurobindo. At the current market price of Rs 527, the stock is trading at 11.5x and 9.2x its estimated FY2008 and FY2009 earnings respectively. We maintain our Buy recommendation on the stock with a price target of Rs 914," according to Sharekhan report.
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