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Buy Aurobindo Pharma; target of Rs 909: Prabhudas Lilladher

August 09
05:24 2018

Prabhudas Lilladher’s research report on Aurobindo Pharma

While Aurobindo has not yet confirmed the plant where the two batches were manufactured, we believe that those products were manufactured in Unit-16. In CY17, Aurobindo had FDA observations for the newly commissioned betalactum plant, Unit-16, which were later resolved in Q4FY18.

Outlook

While the recall of the batches may be sentimentally negative, it will not impact our earnings estimates of Aurobindo. The stock trades at PE 12.8x and 11.7x of FY19E and FY20E respectively. Aurobindo is one of the two cheapest stocks (other one is Zydus Cadila) among the large cap peers. We maintain ‘Buy’ and retain TP at Rs909

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