HDFC Securities is bullish on Aurobindo Pharma has recommended buy rating on the stock with a target price of Rs 875 in its research report dated November 14, 2018.
HDFC Securities' research report on Aurobindo Pharma
Aurobindo Pharma’s (ARBP) 2QFY19 performance was ahead of our estimates, with revenue at Rs 47.5bn, up 7/12% YoY/QoQ despite a high base of 2QFY18 which includes gRenvela sales. The 11% beat was primarily driven by the US business (~47% of revenue, up 6/18% YoY/QoQ), while all other segments also grew during the quarter. EBITDA came in at Rs 10.3bn, down 8%YoY/ up 32%QoQ with margin at 21.6% (in-line), expanding 326bps QoQ aided by a 188bps improvement in gross margin (now at 57%), as well as operating leverage. PAT at Rs 6.1bn (-22/+34% YoY/QoQ) was impacted by a one-off acquisition cost amounting to Rs 268mn, adjusting for which it stood at Rs 6.4bn.
Trading at 14x FY20E EPS, ARBP remains one of the cheapest among its large cap peers. Maintain BUY with a TP of Rs 875 (15x Sep’20E EPS).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.