Company Update | Pharmaceuticals
March 13, 2019
Aurobindo Pharmaceuticals (APL)
has a big relief in form of Establishment
Inspection report (EIR) for Unit-4 facility in which the USFDA has closed
issued Form 483. The Form 483 is issued to a firm's management at
the conclusion of an inspection when an investigator(s) has observed
Market Cap (` cr)
any conditions that may constitute violations of the Food Drug and
Net Debt (` cr)
Cosmetic (FD&C) Act and related Acts. USFDA had inspected Unit 4
52 Week High / Low
facility in December and issued Form 483, with two observations. Unit
Avg. Daily Volume
4 EIR is very important for the company, as it has filed totally 101
Face Value (`)
products from this facility of which 58 are approved by the USFDA (as
on 31 Dec’2018). As on December’2018, the company had filed 519 US
ANDA’s with 369 already approved.
Shareholding Pattern (%)
Injectable segment, which contributes around 6-7% of sales (FY2018),
MF / Banks / Indian Fls
is a key growth driver for the company expected to grow at 20-25% in
FII / NRIs / OCBs
the short to medium term. In addition, on the profitability front, the
Indian Public / Others
injectable business have ROE higher than the company business ROE
on an average 25-26%. The main reason behind the same is lack of any
big Indian player in the segment, which enables the main integrated
players to enjoy better profitability. Currently according to
Management, the segment in USA enjoys limited completion from 3-4
Thus, the approval of the facility is good relief for the
3-year price chart
According to our interaction with the company, we have understood
that the company is building another complex injectable facility in
USA; which will in future de-risk its Injectable business. The facility will
be functional by end of FY2020.
However, in another development, company’s Unit 16 has received 11
observations and was inspected from February 22- March 1’2019. This
facility makes sterile products and the observations pertain to
procedural lapses and not providing adequate training to employees,
Source: Company, Angel Research
among others. Currently the unit does not contribute significantly and
hence will not have a material impact on the numbers of the company.
Since we have already built in the numbers the potential from the
Injectable business we are not changing our estimates and maintain
our Buy with a revised target of `890.
Sarabjit Kour Nangra
022-39357800 Ext: 6806
Please refer to important disclosures at the end of this report
Research Team Tel: 022 - 39357800
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Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
Reduce (-5% to -15%)
Sell (< -15%)
March 13, 2019