Buy Aurobindo Pharma; target of Rs 565: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Aurobindo Pharma has recommended buy rating on the stock with a target price of Rs 565 in its research report dated February 11, 2023.

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February 15, 2023 / 20:56 IST

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Aurobindo Pharma

Aurobindo Pharma’s (ARBP) Q3FY23 revenue growth of 7% YoY was healthy across US and EU markets, however higher R&D spend and lower GMs led to in-line EBITDA. We expect margin trajectory to improve from FY24. However, pick up in US sales hinge on timely niche approvals along with stabilization of pricing pressure in base business. We believe ARBP has multiple growth drivers in place with investments in vaccines, injectables, biosimilars and PLI, which are expected to be reflected from FY24. At CMP, stock is trading at 10x FY25E P/E. Upgrade to ‘BUY’ given recent correction in stock price and attractive valuations.

Outlook

We cut our FY24/25E EPS est. by 7%/3% to factor in lower margins and upgrade to ‘BUY’ from Accumulate with revised TP of Rs565 (Rs550 earlier) based on 12x Dec 2024E earnings.

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