For 1QFY2019, Aurobindo Pharma (APL) posted decent set of numbers on topline. On sales front, the company posted sales of `4,182cr v/s. `3,621cr in 1QFY2018, a yoy growth of 15.5%. On the operating front, the EBITDA margin at 17.0% v/s. 21.6% in 1QFY2018.Consequently, the Adj. PAT came in at `456cr v/s. `518cr in 1QFY2018, a yoy de-growth of 12.1%. We maintain our Buy rating on the stock.

Outlook and valuation: We expect Aurobindo to report net revenue CAGR of ~16% & net profit to grow at ~9% CAGR during FY2018-20E, due to increased R&D expenditure. However, valuations of the company are cheap V/s its peers and own fair multiples of 17-18x. We recommend a Buy rating with a target price of `780.

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