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Aurobindo Pharma Ltd Research Report - 21st Jan 2016

Pharmaceutical | Published on Nov 18th 2015

IT

For 2QFY2016, Aurobindo Pharma (APL) posted a decent set of results. The company posted a sale of Rs3,280cr (v/s Rs3,320cr expected), a growth of 14.6% yoy. Sales were driven by formulations (which constitute around 79.5% of sales), which grew by 19.9% yoy. The key formulation segments like US, Europe & ROW, and ARV posted a yoy growth of 25.8%, 1.0% and 95.0% respectively. The API, on the other hand, grew by 0.9% yoy. The OPM for the quarter stood at 22.0% (v/s 21.8% expected), ie a yoy expansion of 42bp. The Adj. Net profit for the quarter came in at Rs451cr V/s Rs383cr in 2QFY2015, a yoy growth of 17.5%. We recommend an Accumulate rating on the stock. Mostly in line numbers: For 2QFY2016, APL posted a decent set of results. The company posted a sale of Rs3,280cr (v/s Rs3,320cr expected), a growth of 14.6% yoy. Sales were driven by formulations (which constitute around 79.5% of sales), which grew by 19.9% yoy. The key formulation segments like US, Europe & ROW, and ARV posted a yoy growth of 25.8%, 1.0% and 95.0% respectively. The API, on the other hand, grew by 0.9% yoy. The OPM for the quarter stood at 22.0% (v/s 21.8% expected), ie a yoy expansion of 42bp. The Adj. Net profit for the quarter came in at Rs451cr V/s Rs383cr in 2QFY2015, a yoy growth of 17.5%. Outlook and valuation: We estimate the company’s net sales to log a 12.5% CAGR over FY2015–17E to Rs17,162cr on back of US formulations, which will be supplemented through the recent acquisitions of the Western European formulation businesses of Actavis and US’ Natrol. The acquisitions have also led APL to become a >~US$2bn sales company, with ~80% of sales being accounted by formulations. We recommend an Accumulate on the stock.

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Accumulate

CMP 830
Target Price 872
Investment Period12 Months

Stock Info

MCAP BSE (Rs in Cr)43,293.77
MCAP NSE (Rs in Cr)43,349.36
P/E (x)18.92
EPS (Rs.)39.11
BV (Rs.)130.18
Div Yield (%)0.34
FV (Rs.)1.00
P/BV (x)5.12
EV/Sales (x)3.40
EV/EBITDA (x)15.21

Shareholding Pattern (%)

Promoter54.0
Foreign27.0
Public & Others9.0
Institution8.0
Corporate2.0
Grand Total100.0

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