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Target: ₹554
CMP: ₹463.15
Aurobindo Pharma’s revenue in Q3FY23 rose 6.7 per cent y-o-y to ₹6,407 crore, mainly driven by revenue from the US. Its PAT declined 13.8 per cent y-o-y (+20.0 per cent q-o-q) to ₹491 crore. Revenue from formulations increased 9.2 per cent y-o-y and 14.3 per cent q-o-q, while that from API fell 5.5 per cent y-o-y and 1.5 per cent q-o-q.
In Q3FY23, the company introduced 11 products including six injectables, received final approval for 15 ANDAs and filed 11 new ANDAs, including 2 injectables for approval. It aims to commercialise 40 ANDAs in the next 12 months and has received a few approvals, which are in the process of launching in Q4 FY23.
The US market share recovery, the Penicillin-G project, and the biosimilars business’ new product launches are expected to support the company in generating strong cash flow from FY25. In the coming quarter, we expect margin to remain under pressure as R&D expenditure is expected to be elevated. However, the company’s new products and upcoming projects are likely to support its long-term performance. In addition, the US business is recovering, and sales have increased due to higher demand, volume and stable price. Hence, we reiterate our Buy rating on the stock with a revised target price of ₹554
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