Accumulate Aurobindo Pharma; target of Rs 1525: Prabhudas Lilladher

Prabhudas Lilladher's research report on Aurobindo Pharma

Our FY25/26E EPS estimates remains unchanged. Aurobindo Pharma’s (ARBP) Q1FY25 EBITDA of Rs16.2bn (down 4% QoQ) with OPM of 21.4% was marginally below our estimate. We expect margins to further scale up. Pick up in US sales hinge on timely niche approvals along with stabilization of pricing pressure in the base business.

Outlook

We believe ARBP has multiple growth drivers in place with investments in vaccines, injectables, biosimilars and PLI which are expected to be reflected from FY25. At CMP, the stock is trading at 19x FY26E P/E. We value company at 20x FY26E EPS and assign a TP of Rs1,525/share. Maintain ‘Accumulate’ rating.