Hold Aurobindo Pharma; target of Rs 710: Sharekhan

Sharekhan's research report on Aurobindo Pharma

Q1 numbers were strong; new products, better product mix and operational efficiencies led to robust profitability. Gross debt reduced by ~ Rs 1,084 crore to Rs. 5883.2 crore; net debt fell by Rs. 915 crore to Rs. 4,094 crore. Regulatory hurdles at various plants would weigh on stock until successful resolution.

Outlook

We maintain a Hold rating with an unchanged PT of Rs. 710. We expect company to report sales and profit CAGRs of 29% and 22%,
respectively, in the next two years.