Buy Aurobindo Pharma; target of Rs 909: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Aurobindo Pharma

ARBP has acquired a selected group of products of Sandoz in derma, CNS, women healthcare and hormonal drugs in US. The net addition of sales and EBITDA post acquisition is likely to be US$900m and US$180m, respectively. With all-cash deal of US$900m, the acquisition is valued at 1x P/Sales and 5x EV/EBITDA, which is cheapest generic acquisition in US in recent times. With linkage to captive API, diversification of US portfolio and de-risking of manufacturing activities, we expect the acquisition to be EPS accretive from the first year of integration which is likely to be in FY20E.

Outlook

We maintain 'Buy' and retain TP at Rs909 (18xFY20 EPS).

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