Buy Aurobindo Pharma; target of Rs 985: Motilal Oswal
Motilal Oswal is bullish on Aurobindo Pharma recommended buy rating on the stock with a target price of Rs 985 in its research report dated October 26, 2020.
October 28, 2020 / 01:19 PM IST
Motilal Oswal 's research report on Aurobindo Pharma
Aurobindo Pharma (ARBP) has announced the divestment of Natrol, a wholly-owned unit of its US-based subsidiary, for USD550m (~INR40b) as an all-cash deal. Considering Natrol's FY20 sales/PAT at USD157m/USD27m, the deal is attractive at valuation of 3.5x EV/Sales and 20x P/E on FY20 basis. -ARPB is expected to use the funds to further reduce its debt and strengthen future product pipeline. We have reduced our FY22E EPS estimate by 2.5% to INR62.2 to factor in the Natrol divestment and revised our price target to INR985 (from INR1,015 earlier), based on 16x 12M forward earnings. Re-iterate Buy.
We value ARBP at 16x 12M forward earnings to arrive at a target price of INR985. Re-iterate Buy.
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.