Neutral Aurobindo Pharma; target of Rs 600: Motilal Oswal

Motilal Oswal recommended Neutral rating on Aurobindo Pharma with a target price of Rs 600 in its research report dated May 29, 2023.

Broker Research

May 31, 2023 / 15:09 IST

neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on Aurobindo Pharma

Aurobindo Pharma (ARBP) delivered a better-than-expected operating performance in 4QFY23, driven by healthy growth in the US/EU/ROW formulation and API segments. In addition to robust ANDA filings, ARBP continues to work toward building a niche portfolio in the biosimilar/ peptide space. Its ambitious Pen-G project is also on track for commercialization in FY25. We raise our FY24/FY25 EPS estimates by 3%/4% to factor in 1) additional new business opportunities due to regulatory issues at peers, 2) limitedcompetition product launches, and 3) a better outlook on operational costs, particularly raw material and freight costs. We value ARBP at 11x 12M forward earnings to arrive at a TP of INR600. Growth prospects look encouraging for the next 2-3 years on the back of 1) better scope to garner US generics business, given its presence across the manufacturing value chain, 2) regulatory-compliant facilities, and 3) work-in-progress to develop complex products. However, the current valuation adequately prices in the upside in earnings. Maintain Neutral.

Outlook

We value ARBP at 11x 12M forward earnings to arrive at a TP of INR600. However, the current valuation adequately prices in the upside in earnings. Maintain Neutral.

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