Motilal Oswal's research report on Aurobindo Pharma
Aurobindo Pharma (ARBP) delivered in-line operational performance in 1QFY25. The robust execution across key markets was partly offset by seasonality and higher remediation costs for the quarter. We largely maintain our estimates for FY25/FY26. We value ARBP at 18x 12M forward earnings to arrive at our TP of INR1,500. ARBP is progressing well on: a) scaling up its Pen-G production, b) resolving regulatory issues at the Eugia site III, c) clinical development of the biosimilar portfolio, and d) strengthening the US generic pipeline. We model a 15% earnings CAGR over FY24-26. Considering limited upside from the current level, we reiterate our Neutral rating on the stock.
Outlook
We largely maintain our estimates for FY25/FY26. We value ARBP at 18x 12M forward earnings to arrive at our TP of INR1,500.
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