Buy Aurobindo Pharma; target of Rs 909: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Aurobindo Pharma has recommended buy rating on the stock with a target price of Rs 909 in its research report dated May 21, 2018.

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May 28, 2018 / 15:48 IST

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Aurobindo Pharma

Regulatory boost from USFDA for Penem plant in Bhiwadi: ARBP (Aurobindo) received VAI status from USFDA post the company's adequate address of the concerns on the Bhiwadi plant. The assigned status by USFDA is positive development for ARBP as the status implies that the plant is unlikely to receive warning letter. ARBP received three observations under Form-483s during the regulator's visit of the plant in March CY18. The plant is exclusive production facilities of Penem injectable and API. The observations were on the lighter side and easier to address, which are: a)lack of written procedures for production and process controls, b)employees lack training required to perform specialist functions in the plant and c)the laboratory control mechanisms are not drafted by the organisational unit.

Outlook

ARBP received revenues of US$22m from Tazo-Pip in FY17 and expected to have revenues of US$30m in FY18E. While it will be too early to discount the possibility in earnings estimates, ARBP's 9% Rx share in Tazo-Pip may gain from 16% Rx share of Apotex going forward. We maintain Buy and retain TP at Rs909.

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