AUROBINDO PHARMA LTD - Quantamental Equity Research

Quantamental Equity Research on AUROBINDO PHARMA LTD | Release: 19 Feb 2019 16:36:48 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:AUROPHARMA and BSE CODE:524804
Last Close:  INR 722.6
Fair Value:  INR 762.3
Est. Price by Mar 19:  INR 839.05
Market Capitalization (INR Crs):  42337.68
Industry:  Pharmaceuticals
Rating:  BUY
Upside:  16%
Company Profile
Aurobindo Pharma is engaged in manufacturing and marketing of active pharmaceutical ingredients, generic pharmaceuticals and related services.
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 10% 66% 190%  
EBIT % 6% 43% 418%  
Earnings % 5% 54% 725%  
Book Value %  25% 127% 348%  
Stock Total Return %  -5% -6% 610%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 51.87  
(B) FII/FPI 20.07  
(C) DII/Insurance Companies 14.44  
(D) Public holding < 2 lakhs of cap. 6.51  
(E) Others 7.11  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18  Mar-19 E   Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   
Price 94 98 62 87 279 658 764 648 617 839 955 1063 1183 1273  
Return on Equity 31% 23% -5% 11% 31% 31% 28% 25% 21% 15% 15% 14% 14% 13%  
Price to Earning  4.7 5.1 -14.5 8.6 6.9 12.2 22.1 16.5 14.9 24.2 24.2 24.2 24.2 24.2  
EVTI 1.3 1.2 1.1 1.0 1.5 1.9 3.6 2.7 2.5 2.8 2.8 2.7 2.7 2.7  
EVTIFM 4.7 5.1 -14.5 8.6 6.9 12.2 22.1 16.5 14.9 24.2 24.2 24.2 24.2 24.2  
Price to Book Value 1.4 1.2 0.8 1.0 2.2 3.7 6.1 4.0 3.1 3.6 3.6 3.4 3.3 3.1  
Debt to Equity  1.2 1.0 1.3 1.3 1.0 0.9 0.7 0.4 0.4 0.3 0.2 0.1 0.0 0.0  
Dividend Yield 1% 2% 2% 2% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0%  
Cash Flow to Firm 16% 0% -6% 2% 4% 1% 1% 7% -1% 2% 3% 5% 6% 6%  
Detailed Estimates
Title Mar-18 Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
Sales     16,463.03     18,870.31     21,175.65     23,253.23     24,975.26     26,224.03  
EBITDA       3,876.87       3,793.40       4,256.83       4,674.47       5,020.64       5,271.67  
EBIT       3,318.90       3,153.84       3,574.22       3,962.35       4,364.72       4,667.52  
PBT       3,241.18       3,076.12       3,499.49       3,898.47       4,335.22       4,667.52  
NPAT       2,423.17       2,030.76       2,310.26       2,573.65       2,861.99       3,081.36  
Price to Earning             14.91            24.21            24.21            24.21            24.21            24.21  
Price to Book Value              3.09              3.62              3.55              3.43              3.32              3.14  
Debt to Equity               0.41              0.34              0.25              0.10                 -                   -    
Return on Equity              0.21              0.15              0.15              0.14              0.14              0.13  
Enterprise Value to Total Income (EVTI)              2.45              2.82              2.80              2.73              2.72              2.68  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            16.97            26.75            26.30            25.42            24.70            23.92  
Price or Est. Share Prices          616.79          839.05          954.55       1,063.40       1,182.55       1,273.20  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT       3,076.12       3,499.49       3,898.47       4,335.22       4,667.52  
Interest            77.72            74.74            63.88            29.50                 -    
Depreciation          639.56          682.60          712.12          655.92          604.15  
Cash Flow Before Tax       3,793.40       4,256.83       4,674.47       5,020.64       5,271.67  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax       2,504.02       2,809.93       3,085.62       3,314.13       3,479.83  
Terminal Cash Flow                                                                                    -       60,539.27  
Total Cash Flow       2,504.02       2,809.93       3,085.62       3,314.13     64,019.11  
Present Value of Cash Flow     44,663.25  
Debt                 -    
Value of Equity     44,663.25  
Fair Value Per Share          762.30  
Equity          42,338
Debt            4,770
Beta Take from Reuters 0.84
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid                 78
Tax Benefit                 20
Interest Net of Tax                 58
Debt            4,770
Cost of Debt 1%
Cost of Equity 13%
Debt Weight 10%
Equity Weight 90%
WACC 12%
Cash Flow of Mar-23 E       3,479.83
Growth 6.1%
Present Value of Terminal Cashflow     60,539.27
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income Unpledged Prom Hold % PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  Sun Pharma.Inds.           422.90        101,468          170.98            19.96            10.41              2.99            16.63              2.47            21.75              0.27              0.47            15.53            15.75          31,733            50.28                 80            11.57            16.34     -1,015.32          310.00          228.82
   2  Aurobindo Pharma           722.60          42,338          221.43            31.16            22.85              2.14            15.96              3.26            18.03              0.41              0.35            29.28            26.10          21,244            50.68                 63            10.91            21.53            16.48            22.97          443.00
   3  Cadila Health.           314.00          32,146            87.03            29.08            18.28              2.46            17.10              3.61            16.24              0.62              1.11            23.21            21.21          14,436            74.79                 67            20.83              9.75            22.32            -6.00          194.60
   4  Dr Reddy's Labs        2,563.35          42,567          790.42            20.19              7.75              2.84            26.27              3.24            24.09              0.40              0.78            13.11            13.20          15,868            26.77               107              1.23              0.80            -3.47            65.28       1,375.98
   5  Cipla           540.55          43,552          182.97            11.63              9.64              2.78            39.01              2.95            31.40              0.29              0.55              9.64              8.93          16,344            36.68               172            -0.11              2.39          -11.89          -17.06          261.58
   6  Strides Pharma           402.15            3,601          264.06            65.31            16.15              1.22            14.08              1.52              4.20              1.03              0.50            63.54            78.58            4,272            21.89               180              8.44              6.10     -3,472.64          234.73          754.91

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