Buy Aurobindo Pharma; target of Rs 905: Emkay

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26 Aug, 2025 12:21

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Emkay's research report on Aurobindo PharmaOverall results marginally below expectations with revenues at Rs 34.9bn (estimate Rs 35.9bn), EBITDA at Rs 8.23bn (est. Rs 8.5bn) and PAT at cRs 5.2bn (est. cRs 5.5bn). EBITDA margins stood at c23.5% vs expectations of c23.8% However results overshadowed by regulatory action at Unit VII, oral solids manufacturing facility, which accounts for c53% of pending approvals
Maintain our operating leverage thesis given the huge US generic pipeline includinghigher margin injectable and Aurobindo’s well entrenched position in API’s. Aurobindo has also dropped its fund raising in the interim eliminating the risk of equity dilution
Retain our estimates and BUY stock rating, valuing Aurobindo at 18x FY18 EPS of Rs 50.3/share with target price of Rs 905/shareValuations and risks: We value Aurobindo at 18x FY18e EPS of Rs 50.3/share. Our derived target price is Rs 905/share. We maintain our BUY stock rating. Striving for growth through M&A is the biggest risk for Aurobindo especially given its size apart from the regulatory risks relating to recent Form 483 issued for its Unit VII facilty and delays in US FDA approvalsFor all recommendations, 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.

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