Motilal Oswal's research report on Aurobindo Pharma
Aurobindo’s Unit 4 facility was inspected by the USFDA in April 2017. The observation letter is out – although there are no data integrity issues, remediation requires infra repair, change in equipment, training, etc. We do not see a risk of warning letter, but believe that approvals from this facility may get delayed by six months.
Outlook
With the recent acquisition in EU (Actavis assets) and US (Natrol), the share of high-margin formulations in total revenues has increased to 80% (v/s 54% in FY10), positioning it among large-cap formulation players. Our target price of INR 900.
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