Emkay's research report on Aurobindo Pharma
"Aurobindo’s Q1FY15 results (vs expectation)- Revenues at Rs29.1bn (vs Rs28.9bn), EBITDA Rs6.6bn (vs Rs6.5bn) and APAT at Rs4.1bn (vs Rs4.2bn)
Consolidation of Actavis acquired European business led to lower margins. 1Q15 was the last quarter of high contribution from gCymbalta. API business growth low at 4%
Long term scale benefits outweigh near term consolidation challenges. US base business excluding gCymbalta remains strong and EU turnaround to add to the bottom line in FY16
Tepid financial performance in FY15E provides an opportunity to accumulate for long term solid returns.
We are upgrading our target multiple on the stock to 15x FY16E EPS factoring the strong growth ahead (24% CAGR FY16E-FY18E). We upgrade the stock to a BUY with a TP of Rs 890 (630 earlier) at 15x on our FY16E EPS of Rs 59.3", says Emkay Global Financial Services research.
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