Dear All,
Forwarding you the Result Update on Aurobindo Pharma for 4QFY2011 with a Buy recommendation and a Target Price of `278 (12 months).
For 4QFY2011, Aurobindo Pharma (APL) posted lower-than-expected results. Although top-line performance was above our estimates, led by the formulation segment’s growth, the company’s operating as well as PAT performance was below our expectations. We maintain our Buy recommendation on the stock.
Growth in the US and ARV formulation segments boosts revenue: Net sales grew strongly by 25.2% yoy to `1,128, driven by the US and ARV formulation segments. The US formulation segment grew by healthy 51.6% yoy to `350cr. The ARV formulation segment posted 32.8% yoy growth to `180cr. Gross margin came in at 46.3% (48.0%), impacted by the increase in raw-material costs. OPM for the quarter declined to 16.6% yoy, lower than our estimates of 20.6%, impacted by increased employee and other expenses. Net profit came in at `125.1cr (`122cr).
Outlook and valuation: Commencement of operations at the Hyderabad SEZ and incremental contribution from the Pfizer deal would boost APL’s earnings with better growth visibility going forward. We estimate net sales to log a 12.7% CAGR to `5,243cr over FY2011–13E on the back of supply agreements and the US and ARV formulation contracts. We expect APL’s recurring earnings (excluding other operating income) to post a 29.5% CAGR over FY2011–13E to `557cr on the back of sales growth and OPM expansion. We maintain our Buy recommendation on the stock with a target price of `278.
Kindly click on the following link to view the Report.
If you have any further queries, feel free to call us on 022 39357600, Extn: 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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