Buy Aurobindo Pharma; target of Rs 970: Axis Direct

We met Mr. Robert Cunard (CEO, Aurobindo USA) and Mr. Ronald Quadrel (CEO, Auromedics [Injectables]). Key takeaways: (1) US growth momentum (on high base) to continue with strong pace of approvals (40 per year for next 2-3 years); (2) Injectables picking up momentum with increasing market share and improving quality of approvals; (3) Focus on improving service levels and maintain/improve market share to reduce impact of price erosion on channel consolidation; (4) Expects to monetize complex products from FY19 (oncology, hormones and complex injectables); (5) Launch efficiency to improve post capacity expansion at Unit VII and shifting manufacturing of EU markets to a new facility.

 

Maintain BUY with TP of Rs 970 (18x FY18E EPS), as strong US approval momentum and pipeline place ARBP in a sweet spot.For all recommendations, click hereDisclaimer: 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.