Q3FY21 Result Update - Aurobindo Pharma - ICICI Direct

Revenues grew 8.0% YoY to Rs. 6365 crore led by 13.2% YoY growth in Europe formulations business to Rs. 1671 crore. US business grew 6.8% YoY to Rs. 3172 crore. ARV segment grew 41.5% YoY to Rs. 443 crore. RoW markets posted growth of 14.5% YoY to Rs. 396 crore. However, API segment de-grew 13.6% YoY to Rs. 682 crore. EBITDA margins grew 101 bps YoY to 21.5% with higher gross margins being partly offset by higher other expenditure. EBITDA grew 13.3% YoY to Rs. 1369 crore. Adjusted PAT grew 16.4% YoY to Rs. 836.5 crore in line with operational performance and higher other income. Exceptional items of Rs. 2814 crore included 1) gain on Natrol business sale, 2) equity interest re-measurement gains in Eugia and 3) impairment charges.

Valuation & Outlook

Adjusting for certain one-off exceptional items, Q3 results were in line with I-direct estimates on all fronts. Aurobindo has one of the most 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 net debt position from foregoing the Sandoz deal and from the recent sale of Natrol business. 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. Additionally, participation in the PLI scheme, will enhance its backward integration in antibiotics and open up new revenue streams to support its growth prospects in the future. We maintain BUY and arrive at a target price of Rs. 1165 (vs. earlier Rs. 1025) at 16x FY23E EPS of Rs. 72.8.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Aurobindo_Q3FY21.pdf

Shares of AUROBINDO PHARMA LTD. was last trading in BSE at Rs.929.9 as compared to the previous close of Rs. 935.1. The total number of shares traded during the day was 100809 in over 2568 trades.

The stock hit an intraday high of Rs. 952 and intraday low of 924.1. The net turnover during the day was Rs. 94128381.

Source : Equity Bulls

Keywords