ICICI Direct is bullish on Aurobindo Pharma has recommended buy rating on the stock with a target price of Rs 735 in its research report dated August 08, 2019.
ICICI Direct's research report on Aurobindo Pharma
Revenues grew 28.1% YoY to Rs 5444.6 crore (I-direct estimate: Rs 5735.3 crore) mainly due to 42.3% YoY growth in the US to Rs 2688.4 crore (I-direct estimate: Rs 2677.1 crore). EBITDA margins improved 441 bps YoY to 21.1% (I-direct estimate: 19.8%) mainly due to improvement in gross margins (57.8% vs. 55.1% in Q1FY19). EBITDA grew 61.9% to Rs 1151.1 crore vs. I-direct estimate of Rs 1134.8 crore. Adjusted net profit (excluding exceptional item) grew 42.3% YoY to Rs 648.5 crore (I-direct estimate: Rs 682.1 crore). Delta vis-à-vis EBITDA was higher tax rate (26.4% vs. 20.2% in Q1FY19).
Aurobindo possesses one of the best enduring ecosystems among peers (vertically integrated model, lower product concentration). We arrive at our target price of Rs 735 based on 12x FY21E EPS of Rs 61.2.
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