Buy Aurobindo Pharma; target of Rs 985: Motilal Oswal

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Motilal Oswal 's research report on Aurobindo Pharma

Aurobindo Pharma (ARBP) has announced the divestment of Natrol, a wholly-owned unit of its US-based subsidiary, for USD550m (~INR40b) as an all-cash deal. Considering Natrol's FY20 sales/PAT at USD157m/USD27m, the deal is attractive at valuation of 3.5x EV/Sales and 20x P/E on FY20 basis. -ARPB is expected to use the funds to further reduce its debt and strengthen future product pipeline. We have reduced our FY22E EPS estimate by 2.5% to INR62.2 to factor in the Natrol divestment and revised our price target to INR985 (from INR1,015 earlier), based on 16x 12M forward earnings. Re-iterate Buy.

Outlook

We value ARBP at 16x 12M forward earnings to arrive at a target price of INR985. Re-iterate Buy.

For all recommendations report, click here

Disclaimer: 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.

Read More