Buy Aurobindo Pharma Ltd For Target Rs.1,540 By Geojit Financial Services Ltd
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
Higher volume and new launches drive revenue
Aurobindo Pharma Ltd (ARBP) is a leading vertically-integrated pharmaceuticals company. Its business units comprise formulations, custom synthesis, peptides, aurozymes, research and development (R&D) and active pharmaceutical ingredients (API).
* In Q2FY25, consolidated revenue rose 8.0% YoY to Rs. 7,796cr, driven by strong base product sales in the U.S., continued growth trajectory in Europe, and growth markets.
* The company’s U.S. revenue increased to Rs. 3,530cr, (+4.3% YoY, excluding revenue of Puerto Rico), aided by volume gains and new product launches. Europe revenue rose to Rs. 2,105cr (+19.0% YoY) on a robust performance across all key geographies within the region. Growth markets grew to Rs. 812cr (+44.0% YoY), supported by sales across markets and expansion into new geographies.
* EBITDA increased 11.6% YoY to Rs. 1,566cr, driven by stable raw material prices. Along with an EBITDA margin expansion of 70bps YoY to 20.1%.
* The company expects FY25 EBITDA margin to be in the range of 21-22%.
* The company’s reported PAT increased 8.6% YoY to Rs. 817cr. However, PAT growth was partly offset by higher total tax expense. Aurobindo expects a tax rate of ~30% for FY25.
Outlook & Valuation
Aurobindo Pharma’s revenue grew during the quarter on account of increased revenue from the U.S., and Europe. The company witnessed growth in volume, and it has launched new products, which supported its topline. EBITDA margin is expected to improve as against FY24, which indicates better profitability for the company in the future. Additionally, Aurobindo expects stable pricing environment in the US market, indicates firm foundation for the future performance. Europe and growth markets are expected to continue their positive momentum. Therefore, we maintain our rating on the stock to BUY, with a revised target price of Rs. 1,540, based on 20x FY26x Adj. EPS
For More Geojit Financial Services Ltd Disclaimer https://www.geojit.com/disclaimer
SEBI Registration Number: INH200000345
