Motilal Oswal's report on Aurobindo Pharma
Aurobindo Pharma (ARBP) recorded 7% QoQ decline (down 13% YoY) in the US base business for 3Q, leading to concerns about the US business growth outlook. We believe this a one-off event as the company faces least product concentration risk among peers.
Outlook
With the recent acquisition in EU (Actavis assets) and US (Natrol), the share of high-margin formulations in total revenues has increased to 80% (v/s 54% in FY10), positioning it among large-cap formulation players. Our target price of INR 915 discounts ARBP’s 1HFY19E EPS at 18x P/E multiple.
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