Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Aurobindo Pharma (ARBN.BO) Rs1,175.00
Positive News – Estimates Under Review Equity Research
First Take: Above expectation on formulations growth; reiterate Buy
News
Aurobindo reported 3QFY11 net income of Rs1.89 bn, 34%/26% above
our/Bloomberg consensus estimates. Revenue of Rs11.9 bn was 1%/12%
above GS/Bloomberg consensus estimates, as we believe our key
hypothesis of formulations-driven growth has played out, driven by the US
and RoW (48% and 72% yoy growth, respectively). EBIT margins were 600
bp above our expectations owing to the closure of its Chinese operations
(Aurobindo Biopharma) last month and should continue to act as tailwinds
to operating profits.
Analysis
(1) RoW formulations business picks up along with US formulations:
Aurobindo’s 30% yoy sales growth in 3QFY11 has been largely driven by a
54% yoy growth in its formulations business, primarily from the US.
However, greater-than-anticipated revenue growth in the RoW
formulations business (72% yoy) was a positive surprise, which could
imply a pickup in supplies for its Pfizer deal.
(2) ANDA and dossier filing momentum provides comfort on outlook:
Aurobindo filed 15 ANDAs in the US and 54 dossiers in Europe in 3QFY11,
which is one of the highest among its peers. We continue to believe that
this ANDA pipeline (200 cumulative filings as of December 2010, with 128
approvals) could be a key driver of its US formulations revenues, along
with its supply agreement with Pfizer and Astra Zeneca.
Implications
We reiterate our Buy rating on Aurobindo, as we see continued evidence of
its transformation into a higher quality, higher margin formulations
business. We believe the stock is materially undervalued vs. peers, as it is
trading at a 37% discount to the sector on FY12E P/E. Our estimates and
target price are under review, pending further details from management on
the formulations growth trajectory.
INVESTMENT LIST MEMBERSHIP
Asia Pacific Buy List
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Aurobindo Pharma (ARBN.BO) Rs1,175.00
Positive News – Estimates Under Review Equity Research
First Take: Above expectation on formulations growth; reiterate Buy
News
Aurobindo reported 3QFY11 net income of Rs1.89 bn, 34%/26% above
our/Bloomberg consensus estimates. Revenue of Rs11.9 bn was 1%/12%
above GS/Bloomberg consensus estimates, as we believe our key
hypothesis of formulations-driven growth has played out, driven by the US
and RoW (48% and 72% yoy growth, respectively). EBIT margins were 600
bp above our expectations owing to the closure of its Chinese operations
(Aurobindo Biopharma) last month and should continue to act as tailwinds
to operating profits.
Analysis
(1) RoW formulations business picks up along with US formulations:
Aurobindo’s 30% yoy sales growth in 3QFY11 has been largely driven by a
54% yoy growth in its formulations business, primarily from the US.
However, greater-than-anticipated revenue growth in the RoW
formulations business (72% yoy) was a positive surprise, which could
imply a pickup in supplies for its Pfizer deal.
(2) ANDA and dossier filing momentum provides comfort on outlook:
Aurobindo filed 15 ANDAs in the US and 54 dossiers in Europe in 3QFY11,
which is one of the highest among its peers. We continue to believe that
this ANDA pipeline (200 cumulative filings as of December 2010, with 128
approvals) could be a key driver of its US formulations revenues, along
with its supply agreement with Pfizer and Astra Zeneca.
Implications
We reiterate our Buy rating on Aurobindo, as we see continued evidence of
its transformation into a higher quality, higher margin formulations
business. We believe the stock is materially undervalued vs. peers, as it is
trading at a 37% discount to the sector on FY12E P/E. Our estimates and
target price are under review, pending further details from management on
the formulations growth trajectory.
INVESTMENT LIST MEMBERSHIP
Asia Pacific Buy List
No comments:
Post a Comment