Analyst Research Report Snapshot

Title:

Aurobindo Pharma Ltd. | Q2FY14 First Cut Analysis

Price:

$23.00

Provider:

IndiaNivesh Securities Pvt Ltd

Date:

07 Nov 2013

Pages:

3

Type:

AcrobatPDF

Companies referenced:

ARBN.NS

Available for Immediate Download
Summary:

Aurobindo Pharma Ltd. | Q2FY14 First Cut Analysis Positive surprise on margins front, maintain BUY Robust growth from USA (+53% y-o-y in USD term), higher contribution from formulation business, and better product mix lead to substantial improvement in margins of the company. Aurobindo’s revenue grew ~28% y-o-y (11.6% q-o-q) to Rs 18,970 mn (V/s INSPL est = Rs 19,940 mn) slightly below our estimates but better than consensus. EBITDA margins increased ~620 bps y-o-y to 23.1% level (V/s INSPL est 18.4%) & EBITDA grew 75% y-o-y to Rs 4,384 (V/s INSPL est= Rs 3,674 mn). Adjusting for forex losses of Rs 683 mn in Q2FY14 V/s forex gain of 1,177 mn in Q2FY13, net profit grew 189% y-o-y to Rs 3,022 mn (V/s INSPL est= Rs 2,135mn). Valuations: At CMP of Rs 238, the stock is trading at P/E multiple of 8.8x of FY14E & 6.8x of FY15E earnings estimates. During the quarter positive surprise was on the margins front. Sustainability of margins at current level would be key moniterabale, though we believe substantial improvement in margins is likely. In our view, considering robust performance of the company in the last two quarters & promising outlook, earnings up-gradation & re-rating of the stock seems on the cards. We continue to maintain strong BUY on the stock, while we intend to come out with revised target price & detailed analysis after attending concall scheduled for today (08th November 2013). (Our earlier target price was Rs 252).

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