KR Choksey's report on Aurobindo Pharma
Aurobindo reported Revenue growth of 8.8% YoY (-3.8% QoQ) to INR 59.2 bn, led by the US, & Antiretroviral business. Formulation business grew 9.2% YoY( -4.8% QoQ, ~87% of revenue) while API rose 6.5% YoY (+3.2% QoQ, ~13% of revenue). EBITDA for the quarter rose 9.7% YoY (-4.5% QoQ) to INR 12.6 bn while EBITDA margin expanded 17 bps YoY/ (down 15 bps QoQ) to 21.2% in 1QFY21 (from 21.1% last year). Adj Net Profit rose 20.4% YoY (-6.8% QoQ) to INR 7.8 bn. Adj. Net Profit Margin for the quarter expanded 126 bps YoY to 13.2.0% (down 43 bps QoQ) from 11.9% in 1QFY20. Reported PAT came at INR 7,806 mn (+22.8% YoY, -8.1% QoQ). Investment in Research for the quarter was INR 2.5 bn at 4.3% of revenue. Net organic capex for the quarter was ~USD 49 million. Aurobindo received final approval for 10 ANDAs from USFDA during the quarter. Company announced an interim dividend of INR 1.25/share for FY20-21.
In the wake of in-line performance in 1QFY21, faster than expected debt reduction/stable margins & nearing of regulatory clearance, we raise our target price upwards to INR 1,027/share (earlier INR 894/share) by applying a higher PE multiple of 15.5x on FY22E EPS of INR 66.3/share (earlier P/E multiple 13.5x ), an upside potential of 17.0%. Accordingly, we reiterate a “BUY” rating on the shares of Aurobindo Pharma.
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