AurobindoPharma May29!15!2

15 Sharekhan Home Next May 29, 2015 investor’s eye stock update Company details Price chart Shareholding pattern Price performance (%) 1m 3m 6m 12m Absolute 0.8 20.4 19.8 105.3 Relative 0.3 28.1 24.5 80.4 to Sensex Aurobindo Pharma Reco: Hold Stock Update Healthy performance in base business; PT revised up to Rs1,470, Hold maintained CMP: Rs1,375 Key points Aurobindo Pharma reported a 35.7% rise in net sales to Rs3,162 crore in Q4FY2015 which included revenues from its newly acquired businesses in Europe and USA. Even excluding the contribution from the newly acquired entities and one-off sales from generic Cymbalta launched under exclusivity in Q4FY2014, the base business appears to have grown healthy during the quarter. The operating profit margin (OPM) of the company declined sharply by 1,114BPS YoY to 20.7% in Q4, mainly because of a high base caused by a one-off income from Cymbalta exclusivity and integration of loss-making business of Actavis in Europe. However, we believe the OPM from base business improved during the quarter on a Y-o-Y basis. Going forward, the company is likely to see better traction on the OPM front as the newly acquired entities will show a better profitability (Actavis business is likely to turnaround by the end of next fiscal). The board has recommended a bonus in the ratio of 1:1. We have fine-tuned our estimates and revised our price target to Rs1,470, which implies 18x FY2017E EPS. We maintain our Hold rating on the stock. Price target: Rs1,470 Market cap: Rs40,150 cr 52 week high/low: Rs1432/620 NSE volume: 15.8 lakh (no. of shares) BSE code: 524804 NSE code: AUROPHARMA Sharekhan code: AUROPHARMA Free float: 13.4 cr (no. of shares) Results Rs cr Particulars Q4FY15 Q4FY14 YoY % Q3FY15 QoQ % Net sales 3,162.1 2,329.8 35.7 3,166.2 -0.1 Operating expenditure 2,506.0 1,586.9 57.9 2,554.0 -1.9 Operating profit 656.1 743.0 -11.7 612.2 7.2 Other income 6.7 10.7 -36.7 35.9 -81.2 EBITDA 662.8 753.6 -12.0 648.1 2.3 Interest 22.6 34.2 -34.0 21.9 3.2 Depreciation 84.7 88.0 -3.8 67.3 25.9 PBT 555.6 631.4 -12.0 558.9 -0.6 Tax 153.4 165.3 -7.2 156.3 -1.9 Adjusted PAT 402.6 466.3 -13.6 404.6 -0.5 Forex loss/(gains) -1.2 -35.6 -96.7 20.2 0.0 Net profit (reported) 403.8 501.8 -19.5 384.4 5.1 EPS (Rs) 13.8 16.0 -13.6 13.9 -0.5 Margins (%) BPS BPS OPM 20.7 31.9 -1,114 19.3 141 EBITDA margin 21.0 32.3 -1,138 20.5 49 Net profit margin 12.7 20.0 -728 12.8 -4 Tax rate 27.6 26.2 143 28.0 -36

AurobindoPharma May29!15!2

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