Hold Aurobindo Pharma; target of Rs 716: Sharekhan

Sharekhan's research report on Aurobindo Pharma

Aurobindo Pharma Limited (Aurobindo) reported a mixed Q4 as it outperformed on the revenue front. The company reported in-line performance on the operating profits front but underperformed on a net income basis The company has been witnessing stronger growth in the U.S., Europe, growth markets, and APIs. The company has been seeing stabilisation in gross margins over the last three quarters. We believe the upside potential to the operating profitability is stronger, given the series of feasible drivers such as differentiated product launches, including gRevlimid, PenG, Biosimilars, expected continued growth in injectables, and regular new product launches in the U.S. likely over FY2024E-FY2025E.

Outlook

We maintain HOLD with a revised PT of Rs. 716. The company’s shares are trading at ~13.0x/11.9x its FY2024E/FY2025E EPS, in line with its historical P/E.

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