Invest In This Pharma Stock, Trading At 25% Discount From Highs, For A Target Price Of Rs 626

Leading brokerage firm KR Choksey has given buy rating to the pharmaceuticals sector stock Aurobindo Pharma Ltd for a target price of Rs 626 apiece with a potential gain of 10%. Aurobindo reported revenue growth of 9.4% YoY (+7.3% QoQ) to INR 62.36 bn in Q1FY23 after a continuous decline in growth, on a YoY basis, over the last few quarters.

This improvement was the result of a return of growth in the US, strong growth in Growth markets, and robust growth posted in Anti-Retroviral (ARV) segment.

Aurobindo Pharma Ltd Stock Outlook

The current market price of the stock is Rs 571 apiece with a 52-week high of Rs 767 apiece and 52-week low of Rs 503 apiece, respectively. According to KR Choksey, if investors buy the stock at its current market price of Rs 571 apiece it can surge to Rs 626 apiece. Currently, the stock is trading at a discount of 25% from its highs.

Aurobindo Pharma Ltd Return

The stock has given returns of 9% in 3 months, fell 20% in 1 year, 5% in 3 years, and 18% in 5 years.

Aurobindo Pharma Ltd Revenue In Q1FY23

Aurobindo reported revenue growth of 9.4% YoY (+7.3% QoQ) to INR 62.36 bn in Q1FY23 after a continuous decline in growth, on a YoY basis, over the last few quarters. This improvement was the result of a return of growth in the US, strong growth in Growth markets, and robust growth posted in Anti-Retroviral (ARV) segment.

Growth markets include INR 456.0 mn of domestic formulations revenue in Q1FY23.

The US segment (47.6% of total revenue) revenue increased at 10.8% YoY (+8.9% QoQ), Growth Markets (6.9%) revenue rose by 30.8% YoY (+10.0% QoQ), and ARV segment revenue (6.1%) increased at a strong pace of 28.1% YoY (+60.9% QoQ) in Q1FY23.

Aurobindo Pharma Ltd Profitability

Gross Profit Margins (GPMs) declined 479 bps YoY (-284 bps QoQ) to 53.7% in Q1FY23 due to increased raw materials costs, YoY and QoQ, in Q1FY23.

Aurobindo Pharma Ltd EBITDA

EBITDA Margins for the quarter declined 574 bps YoY (-130 bps QoQ) to 15.5% and EBITDA declined 20.2% YoY (-1.0% QoQ) to INR 9.65 bn in Q1FY23. Reported Net Profit declined 32.4% YoY (-9.7% QoQ) to INR 5.20 bn in Q1FY23.

Also, Adj. Net Profit (adjusted for exceptional items and foreign exchange gains) declined at 26.0% YoY (-23.7% QoQ) to INR 5.49 bn in Q1FY23 after other income declined by 50.0% YoY (+39.3% QoQ) and interest expenses increased by 13.6% YoY (+58.8% QoQ), unfavorably, in Q1FY23.

Aurobindo Pharma Ltd Market Capitalization

It has a market capitalization of Rs 33,462.95 crore.

Aurobindo Pharma Ltd About

The company commenced operations in 1988-89 with a single unit manufacturing Semi-Synthetic Penicillin (SSP) at Pondicherry. Aurobindo Pharma became a public company in 1992 and listed its shares on the Indian stock exchanges in 1995.

It is capable of developing, scaling up and commercializing various dosage forms spread across tablets, capsules, soft gels, oral liquids, injectables (solutions, suspensions, lyophilized, etc.), and ophthalmic (three piece and BFS) and nasal delivery systems.

Disclaimer

The stock has been picked from the brokerage report of KR Choksey Research. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.