Re­views

In this edi­tion, we have re­viewed Aurobindo Pharma and Ka­jaria Ceram­ics. We sug­gest our reader-in­vestors to BOOK PROFIT in Aurobindo Pharma and Ka­jaria Ceram­ics.

Dalal Street Investment Journal - - CONTENTS -

We had rec­om­mended Aurobindo Pharma in is­sue no. 5 dated Fe­bru­ary 6Fe­bru­ary 19, 2017 in our cover story “The Half-dozen Must-haves” when the scrip was trad­ing at ₹ 682. Our rec­om­men­da­tion was on the back of its ac­qui­si­tion of Por­tu­gal-based com­pany “Generis Far­ma­ceu­tica” and its ex­ten­sive prod­uct pipe­line with about 159 ANDAS pend­ing for fi­nal ap­proval.

Aurobindo Pharma is a phar­ma­ceu­ti­cal man­u­fac­tur­ing com­pany head­quar­tered in Hyderabad, In­dia. It is the mar­ket leader in semi-syn­thetic peni­cillins with a pres­ence in key ther­a­peu­tic seg­ments such as neu­ro­sciences, car­dio­vas­cu­lar, anti-retro­vi­rals, anti-di­a­bet­ics, gas­troen­terol­ogy and cephalosporins, among oth­ers. Aurobindo ex­ports to over 125 coun­tries across the globe, with more than 70 per cent of its rev­enues de­rived out of in­ter­na­tional op­er­a­tions.

On the fi­nan­cial front, Aurobindo Pharma posted 8.41 per cent de­crease in its rev­enue to ₹ 2,188.29 crore in Q1FY18 from ₹ 2,389.76 crore in Q1FY17. More­over, the com­pany’s PBDT de­clined by 14.55 per cent to ₹ 490.01 crore in the first quar­ter of FY18 on a yearly ba­sis. The com­pany’s net profit too de­clined by 21.48 per cent to ₹ 307.33 crore for the same pe­riod.

On the val­u­a­tion front, the com­pany’s PE stood at 18.98x, whereas its peers Cadila Health­care and Sun Phar­ma­ceu­ti­cal In­dus­tries’ PE stood at 43.81x and 27.33x, re­spec­tively.

Although the prof­its of Aurobindo dropped in the first quar­ter of the cur­rent fis­cal, the share price of Aurobindo Pharma has in­creased by about 12 per cent since our rec­om­men­da­tion. Look­ing at the cur­rent mar­ket con­di­tions, we rec­om­mend in­vestors to BOOK PROFIT in the stock.

Scrip’s Move­ment

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