Buy Aurobindo Pharma; target of Rs 700: Reliance Securities

Reliance Securities' research report on Aurobindo Pharma

Missing ours as well as street expectations, Aurobindo Pharma (ARBP) has delivered a weak performance in 4QFY17 with its Sales, EBITDA and PAT coming in at Rs 36.4bn, Rs 7.7bn and Rs 5.6bn, respectively. Its overall revenue declined by 2.8% YoY due to weak Europe sales (-8% YoY to Rs 7.8bn) and ARV business (-20% YoY to Rs 2.6bn).

Outlook

Considering likely growth in US business backed by strong growth in injectable portfolio and further margin improvement in European business (product transfers to India), we reiterate our BUY recommendation on the stock with a revised Target Price of Rs 700.