According to Citi, the establishment inspection report (EIR) for unit IV is a positive.
Aurobindo Pharma share price continued its gaining momentum on Thursday after the company received an establishment inspection report (EIR) on February 19.
On Wednesday, the share closed 20.40 percent higher at Rs 602.25 on the BSE.
The company has received an establishment inspection report (EIR) with voluntary action initiated (VAI) status from the United States Food and Drug Administration (US FDA).
USFDA inspected Unit IV, a general injectable formulation manufacturing facility at Pashamylaram in Hyderabad, from November 4 to 13, 2019.
At the end of the inspection, USFDA issued a 'Form 483' with 14 observations.
Also, the company received USFDA nod for Asthma drug, Montelukast Sodium (40 Mg), reported CNBC-TV18.
Citi | Rating: Buy | Target: Rs 820 per share
According to Citi, the establishment inspection report (EIR) for unit IV is positive.
The EIR & voluntary action initiated (VAI) implies that it would be business as usual at the plant w.r.t product approvals as unit IV is a key injectable plant for the company and has 46 ANDAs pending approval.
It expects 10-12 approvals annually from Unit-IV, while Sandoz business can add 17 percent to EPS in the first full year post-closure.
The risk-reward has improved further and it is a best-placed company to navigate the more competitive generics landscape, it added.
JPMorgan | Rating: Overweight | Target: Rs 730 per share
The Unit-IV clearance removes the overhang, while Sandoz deal closure is the next catalyst.
The trading multiples is in-line with global peers despite medium-term earnings drivers.At 09:18 hrs, Aurobindo Pharma was quoting at Rs 614.00, up Rs 11.75, or 1.95 percent on the BSE.
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