GEPL Pick of the Week – Aurobindo Pharma Ltd. (video)


Aurobindo Pharma:

With almost USD 140 bn drugs going off patent in the next five years we have a positive view on the generics space thereby narrowing down to Aurobindo Pharma as our pick for the coming week recommended at the price of Rs 915 and a target of Rs1250 over the next 12 months. This company is rapidly shifting towards the high margin formulation space from its traditional API portfolio wherein formulations contributed around 51% of the turnover in FY10. One of the forward looking segments for the company is ARV i.e. Anti retroviral virals in which it is a strong competitor for different global tenders. One of the major triggers for the company is the global multi-product supply agreement with Pfizer the product profile of which would help the company cater to wider range of markets regulated and non- regulated. It has also entered into the CRAMS space to capitalize on the immense opportunity offered by the patent expiries of various drugs. The company has various other expansions in the pipeline with a cumulative capex of Rs 3500 Mn for FY11. With the triggers like shifting to the formulations, increasing supplies to MNCs, venturing into the CRAMS and enhancing the existing product offerings, the company is strongly placed to benefit from each of these.

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