KR Choksey's research report on Aurobindo Pharma
Aurobindo Pharma’s revenue was in-line with our estimates. However, EBITDA and Adj. PAT missed our estimates due to higher -thanexpected other expenses, lower-than-expected other income and higher-than-expected finance cost. We expect revenue to grow at 8.7% CAGR and Adj. PAT to grow at 17.7% CAGR for FY24-FY26E, respectively. We maintain FY26E EPS estimates at INR 79.6 and PE multiple of 20.0x (unchanged) showing our optimism that company is addressing supply chain issues in injectables, and expects stabilization in the coming quarters, new product launches in the US and Europe, is expected to support longterm growth.
Outlook
Additionally, the company is working on improving its API business through backward integration, aiming to reduce dependency on external suppliers and enhance margins over time. Therefore, we arrive at a target price INR 1,591 (unchanged). We revise our rating to “BUY” from “ACCUMULATE” based on the stock price correction.
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