Aurobindo Pharma Limited reported strong numbers for Q2FY21 and the company met the street’s high expectations. Improving demand traction across US, Europe ( due to likely traction in injectables) coupled with a capex of $180-200 mn announced by the company, provide ample visibility on growth. Going ahead focus on developing a strong portfolio of specialty products (biosimilars, Oncology, inhalers, transdermal patches etc) would be key growth drivers. Improving growth prospects and strengthening balance sheet, due to a debt free status targeted by end FY2022 would support P/E multiple expansion.
OutlookWe retain our Buy recommendation on the stock with a revised PT of Rs. 1,024.
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