Hold Aurobindo Pharma; target of Rs 710: Sharekhan

Sharekhan's research report on Aurobindo Pharma

Increased regulatory hurdles at various plants will weigh on stock until successful resolution; Increase in remediation cost will impact margins and profitability. We expect the company to report sales and profit CAGR of 29% and 22%, respectively, over the next two years.

Outlook

Warning Letter for Unit- XI likely to delay future product approvals which could impact FY2020 and FY2021 numbers.. Downgrade to Hold with downward revised Price Target (PT) of Rs 710.