Buy Aurobindo Pharma; target of Rs 271: Angel Broking
Angel Broking is bullish on Aurobindo Pharma and has recommended buy rating on the stock with a target of Rs 271 in its June 4, 2013 research report.
June 06, 2013 / 12:22 IST
Angel Broking`s research report on Aurobindo Pharma
“For 4QFY2013, Aurobindo Pharmaceuticals Ltd (APL) outperformed expectation on the top-line front, while the bottom-line came in below expectations. The OPM came lower than expectations (of 18.3 percent) at 14.3 percent. However, on back of lower taxations, the adj. net profit came in at Rs110cr, still lower than our estimate of Rs194cr. On back of improvement on the financial front and clearance of facilities by the USFDA, the company expects sales to grow by 20.0 percent and OPM to expand by 200-300bps for FY2014. We have a Buy recommendation on the stock.” “Net sales grew strongly by 32.6 percent yoy to Rs1,553cr, led by a robust growth in formulations (41.4 percent yoy growth). The active pharmaceutical ingredients (API) segment grew by 17.0 percent yoy. Formulations in key geographies like the US, and Europe and rest of world (RoW) grew by 61.5 percent and 44.9 percent respectively. Gross margin came in at 48.2 percent (vs 45.2 percent in 4QFY2012) on back of favourable product mix, thus impacting the OPM which came in at 14.3 percent vs10.2 percent in the corresponding quarter of the previous year. This led the company to post an Adj. net profit of Rs110cr.” “The commencement of operations at the Hyderabad SEZ and incremental contribution from the Pfizer deal would boost APL’s earnings and provide better growth visibility going forward. We estimate net sales to log a 14.9 percent CAGR to Rs7,637cr over FY2013–15E on the back of supply agreements in the US and antiretroviral (ARV) formulation contracts. Even after factoring in lower profitability going forward, the stock trades at an attractive valuation. Hence, we maintain our Buy recommendation on the stock with a price target of Rs271,” says Angel Broking research report. Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
Read More
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
