Key points
* Aurobindo Pharma reported a strong performance for Q4FY2014 with the adjusted net profit surging by 324% YoY to Rs466 crore on the back of a 130% increase in the US formulation business. The core OPM (excluding the dossier income) expanded by 1,775BPS to 31% in Q4 while the net sales jumped by 48.4% to Rs2,330 crore.
* The strong performance can be attributed to the launch of generic Cymbalta in December 2013 under shared exclusivity coupled with the other key launches during Q3 and Q4 of FY2014. Though the benefit of Cymbalta exclusivity will not extend beyond June 2014, but the management expects to maintain the growth in the top line and an OPM of 22-23% on the back of the integration of the newly acquired API business of Actavis and an improvement in the base business.
* We revise our earnings estimates up by 27% and 23% for FY2015 and FY2016 to factor in the improvement in the base business and the integration of the newly acquired API business of Actavis. Accordingly, our price target stands revised up by 23% to Rs771. We maintain Buy rating on the stock.
We revise our earnings estimates and price target up to Rs771; maintain Buy
Taking into consideration the effects of the acquisition of Actavis, the growth of the base business in the USA and Europe, and the ramp-up in the cephalosporin business, we revise our earnings estimates up by 27% for FY2015 and 23% for FY2016. Accordingly, our price target stands revised up by 23% to Rs771 (which implies 12x FY2016E earnings per share). We maintain our Buy recommendation on the stock.
To Read Complete Report Click Here
No comments:
Post a Comment