Aurobindo Pharma - Q1FY21 Result Update - ICICI Securities

Q1FY21 revenues grew 8.8% YoY to Rs. 5925 crore (I-direct estimate: Rs. 6070 crore) mainly due to 15.6% YoY growth in the US to Rs. 3107 crore. EU business de-grew 5.0% YoY to Rs. 1322 crore. ARV segment grew 33.6% YoY to Rs. 426 crore. API segment grew 6.6% YoY to Rs. 780 crore. EBITDA margins remained flat YoY at 21.2% (I-direct estimate: 21.5%) as higher gross margins were offset by higher staff costs and other expenditure. EBITDA grew 9.2% YoY to Rs. 1257.4 crore against I-direct estimate of Rs. 1304.1 crore. Adjusted PAT grew 20.4% YoY to Rs. 780.6 crore (I-direct estimate: Rs. 765 crore). Delta vis-à-vis EBITDA was due to lower interest cost and higher other income (including Rs. 22.2 crore in forex gain).

Valuation & Outlook

FY21 is looking much more promising with respite for unit IV, decent Q1 performance and a stable outlook. Aurobindo has one of the best enduring generics ecosystems among peers (vertically integrated model, lower product concentration) to withstand volatility in the US and other generics space. It has also significantly improved its debt position utilising additional cash freed up from foregoing the Sandoz deal. This also bodes well as the company plans to venture into complex areas like biosimilars, vaccines and complex injectables where capital requirements are higher and precise. While a few other plants still remain under the USFDA scrutiny, the clearance for a critical plant indicates the company continues to work towards stricter adherence. We maintain BUY rating and arrive at our revised target price of Rs. 1100 at 15x FY22E EPS of Rs. 73.2.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Aurobindo_Q1FY21.pdf

Shares of AUROBINDO PHARMA LTD. was last trading in BSE at Rs.878.2 as compared to the previous close of Rs. 881.3. The total number of shares traded during the day was 357271 in over 11925 trades.

The stock hit an intraday high of Rs. 899.95 and intraday low of 863.3. The net turnover during the day was Rs. 317480793.

Source : Equity Bulls

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