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Aurobindo Pharma Ltd Stock Analysis

Large Cap
Evaluated by 7106 users | BSE: 524804 | NSE: AUROPHARMA |
Pharmaceuticals & Drugs

Aurobindo Pharma commenced operations in 1988-89 with a single unit manufacturing Semi-Synthetic Penicillin (SSP) at Pondicherry. The company became a public company in 1992 and listed its shares on the Indian stock exchanges in 1995. In addition to being the...

1. Right Stock
Somewhat Good
2. Right Price
3. Right Time

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Aurobindo Pharma Ltd has performed well in some of the past ten years indicating its past ten year financial track record is somewhat good
Value Creation
Value Creation Index Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 14.37%7.9%12.9%22.2%20.93%17.43%14.93%14.47%11.06%11.52%
Value Creation Index 0.22-0.330.090.880.780.480.270.23-0.06-0.02
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 4,1334,2815,4257,1118,0959,1669,60710,27012,25813,266
Y-o-Y Gr. Rt.-3.6%26.7%31.1%13.8%13.2%4.8%6.9%19.4%8.2%
Adjusted EPS (Rs.) 10.133.699.1920.6426.3526.5628.1630.4825.1729.19
Y-o-Y Gr. Rt.--63.6%149.1%124.6%27.7%0.8%6%8.2%-17.4%16%
Book Value per Share (Rs.) 44.1442.8250.4768.8291.77117.3143.99170.38193.73222.32
Adjusted Net Profit 5902155351,2031,5381,5541,6501,7861,4741,710
Net Op. Cash Flow (Rs. Cr.) 2455046253285901,1852,4579225302,162
Debt to Cash Flow from Ops 9.485.544.458.925.563.511.244.038.531.73
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Aurobindo Pharma Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 13.8%10.4%11.4%8.2%
Adjusted EPS 12.5%2.1%1.2%16%
Book Value per Share 19.719.415.614.8
Share Price 35.7% 3% 13.5% 76.2%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 26.318.4819.734.6132.8325.4321.5719.3913.8214.03
Operating Profit Margin (%) 23.4114.5218.9928.228.527.2624.926.1919.7420.26
Net Profit Margin (%) 14.275.029.8616.9219.0116.9617.1817.3912.0312.89
Debt to Equity 0.91.120.950.730.610.610.360.370.40.29
Working Capital Days 259271229235273284278288294310
Cash Conversion Cycle 139158130121159181179182189201
Corporate Governance What do we look at?
Corporate Governance
Board Credentials
Promoter's holding
Transparency
Integrity
Entity Percentage Holding
Promoters 51.94%
Institutions 37.60%
Non-Institutions 10.47%
Pledged *2.212.303.493.824.204.996.176.179.349.27
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Aurobindo Pharma Ltd and arrived at the following conclusion:

Past 10 year's financial track record indicates that Aurobindo Pharma Ltd is a average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Aurobindo Pharma Ltd's performance infers:

Aurobindo Pharma Ltd earnings have grown by 2.1%, whereas share price has appreciated 3% CAGR over the past five years, indicating the company's share price is likely overvalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Aurobindo Pharma Ltd share prices over the last 10 years. Here is what we found out:

Aurobindo Pharma Ltd share price has appreciated 25.1% annually over the past ten years.

Aurobindo Pharma commenced operations in 1988-89 with a single unit manufacturing Semi-Synthetic Penicillin (SSP) at Pondicherry. The company became a public company in 1992 and listed its shares on the Indian stock exchanges in 1995. In addition to being the market leader in Semi-Synthetic Penicillin’s, it has a presence in key therapeutic segments such as neurosciences (CNS), cardiovascular (CVS), anti-retroviral, anti-diabetics, gastroenterology and

Aurobindo Pharma commenced operations in 1988-89 with a single unit manufacturing Semi-Synthetic Penicillin (SSP) at Pondicherry. The company became a public company in 1992 and listed its shares on the Indian stock exchanges in 1995. In addition to being the market leader in Semi-Synthetic Penicillin’s, it has a presence in key therapeutic segments such as neurosciences (CNS), cardiovascular (CVS), anti-retroviral, anti-diabetics, gastroenterology and Anti-biotics. Through cost effective manufacturing capabilities and a few loyal customers, the company also entered the high margin specialty generic formulations segment. Today, it has evolved into a knowledge driven company manufacturing active pharmaceutical ingredients and formulation products. It is R&D focused and has a multi-product portfolio with manufacturing facilities in several countries. The formulation business is systematically organized with a divisional structure, and has a focused team for key international markets. The company’s units for APIs / intermediates and units for formulations are designed to meet the requirements of both advanced as well as emerging market opportunities.

A well-integrated pharma company, the company features among the top 2 Pharmaceutical companies in India in terms of consolidated revenues. Aurobindo exports many countries across the globe with around 90% of revenues derived from international operations. Its customers include premium multi-national companies. With multiple facilities approved by leading regulatory agencies such as USFDA, EU GMP, UK MHRA, South Africa-MCC, Health Canada, WHO and Brazil ANVISA, Aurobindo makes use of in-house R&D for rapid filing of patents, Drug Master Files (DMFs), Abbreviated New Drug Applications (ANDAs) and formulation dossiers across the world. It is among the largest filers of DMFs and ANDAs in India.

Business area of the company

Aurobindo Pharma continues to be one of the world’s fastest growing Active Pharmaceutical Ingredients (API) manufacturing companies, driven by cost leadership, flexibility to produce multiple products in the same manufacturing facilities and capabilities in various therapeutic domains. Its API business has ensured the profitability and growth of its formulations business through seamless vertical integration. Its API business is supported by technologically advanced research and development infrastructure, which develops new products and plays a role in the delivery of products to the market. It has built a strong presence in key therapeutic segments such as Central nervous system (CNS), cardiovascular (CVS), anti-retroviral (ARV), anti-diabetics, gastroenterology and antibiotics. Also, it is building a diversified pipeline in high-margin specialty generic formulations segment.

Awards & Accolades

2015-16:

  • The company was honoured in January 2016, the Indian Drug Manufacturers' Association IDMA Margi Memorial Best Process Patent Award 2014-15 for three US patents.
  • The Pharmaceuticals Export Promotion Council of India (Pharmexcil) conferred upon the company a
    Certificate of Appreciation in recognition of commendable contribution in bulk/APIs category.
  • The Chief Commissioner of Central Excise, Customs and Service Tax, Hyderabad felicitated the company in February 2016 for outstanding performance during the financial year 2014-15.

2016-17:

  • Certificate of Honor in the category of Excellence in HR by CPhI India & UBM India for the initiatives taken for e-learning, skill development, HR automation, talent engagement, leadership competencies & its integration with HR sub-systems.
  • Certificate of Appreciation in the 12th edition of BML Munjal Awards for Excellence in Learning & Development.
  • Received an award for Most Consistent IR (Investor Relations) Practice in Large Cap category for 2016-17 conducted by KPMG, BSE, Bloomberg and IR Society.
  • Winner of the Clarivate Analytics India Innovation Awards 2016.

2017-18:

  • Received ‘Pharmexcil Outstanding Exports Award 2016- 17’ in the category of highest Number of ANDAs filed in the calendar year 2016.
  • Bagged two Awards in ‘Excellence in Skill Development’ & ‘Excellence in Pharma Digital Innovation’ for the 2nd time in row at the India Pharma Awards 2017 in South-Asia’s largest pharmaceutical event- CPhI& PMEC India.
  • Won the ‘IDMA MARGI MEMORIAL BEST PROCESS PATENTS AWARD 2016-17’ (for 2 Indian & 1 US Granted patents; supported by several other patent applications filed during the said year) awarded by Indian Drug Manufacturers’ Association.
  • Received ‘2017 Business Award; from The East Windsor Township for best community enhancement contributions in East Windsor Township.
  • Aurobindo’s Unit 15 at Parawada - Vizag awarded by the State Government of Andhra Pradesh for best management award in manufacturing sector.

2018-19:

  • Aurobindo has been awarded IP Excellence in INDIA 2018 by Questel Orbit INC, as a part of their Indian IP Awards, 2018. The Indian IP Awards are given to facilitate best professionals across the IP (Intellectual Property) Industry.
  • Bagged award for the category of Best CSR Practices in Responsible Business Awards hosted by World CSR Day.
  • Bagged the 'Outstanding Export Award for FY2017-18' conducted by Pharmaceutical Export Promotion Council of India (Pharmexcil).
  • Received ‘IDMA Best API Patents Award 2017- 18’ conducted by Indian Drug Manufacturers association.
  • The Federation of Telangana and Andhra Pradesh Chamber of Commerce and Industry (FTAPCCI) has felicitated Aurobindo with HR Best Practices Awards-2018 in the category of Large-Scale Industries.

2019-20:

  • Bagged the coveted 14th National BML Munjal Award for ’Business Excellence through Learning & Development’ in the Private Sector Manufacturing category from Bharat Ratna Pranab Mukherjee, Former President of India.
  • Aurobindo Unit-III has bagged the Special Commendation Award in the Golden Peacock Environmental Management Awards 2019 from the Institute of Directors (IOD). These awards are regarded as a benchmark of corporate excellence worldwide.
  • Aurobindo has been awarded as Best Energy Efficient Organization under Large Scale Industry Category in CII’s 4th edition of National Energy Efficiency Circle Competition.

Major Events and Milestones

  • 1986: Aurobindo Pharma (APL) one of the world’s top 5 manufacturers of semi synthetic penicillins was incorporated in December 26, 1986 as a private limited company by P.V.Ramprasad Reddy and K.Nityananda Reddy.
  • 1988-1989: Commenced operations with a single unit manufacturing semi synthetic penicillins (SSPs) at Pondicherry.
  • 1992-1993: Another unit was established for the manufacture of CMIC Chloride, a bulk drug intermediate, at pashmylaram near Hyderabad.
  • 1994-1995: Merged with Chaitanya Organics. Commercial production of the pharmaceutical formulation unit started in April.
  • 1994-1995: Aurobindo Pharma became a public company in 1995.
  • 1997-1998: Glaxo (India) the Indian subsidiary of the UK-based multinational formed an alliance with the company to meet its global bulk drug requirements.
  • 1999-2000: Diversified product portfolio further with the introduction of wide range of Cephalosporins (Oral & Sterile) and anti – virals in addition to macrolides, anti-ulcerants, quinolones, semi-synthetic penicillins, and formulations for domestic and export market.
  • 1999-2000: Joint Ventures launched for formulations business in US.
  • 1999-2000: Sri Chakra Remedies was amalgamated with the company.
  • 2001-2002: Launched an exclusive anti-viral division Immune to educate and to provide preventive drug care for HIV/AIDS patients in the country.
  • 2001-2002: Launched two more drugs in 2001 namely Efavirenz (Viranz) and Nelfinavir (NELVEX) for the treatment of AIDS.
  • 2001-2002: Acquired 79% stake in Ranit Pharma Company under the same management. Ranit Pharma and Calc Private were amalgamated with APL as of April 1, 2002.
  • 2003-2004: JV between APL and Shanxi Tongling Pharmaceuticals launched under the name Aurobindo Tongling (Datong) pharmaceuticals China.
  • 2003-2004: Aurobindo’s 100% subsidiary company in China commenced commercial production.
  • 2003-2004: Aurobindo received its first Certificate of Suitability (CoS) approval from the European Directorate for Quality Medicines (EDQM).
  • 2004-2005: Acquired a sterile plant of Dee Pharma.
  • 2004-2005: The State Labour Department of the Government of Andhra Pradesh awarded Aurobindo the ‘Best Management Award’ in 2005 for the company’s contributions towards community development, harmonious employee relations and employee welfare.
  • 2004-2005: US FDA unit of US Department of Health and Human Science approved the company’s Unit VIII facility and received US FDA clearance for AIDS drugs.
  • 2005-2006: Aurobindo made a strategic entry into the premium markets of USA & Europe with generic formulations, participating in the PEPFAR program initiated by the Government of USA.
  • 2005-2006: APL acquired UK based Milpharm Limited, engaged in marketing generic formulations in the UK market.
  • 2007-2008: Aurobindo unveiled a new Logo and Corporate Identity at a ceremony in Hyderabad. The new corporate logo reflects the company’s pace of innovation and its industry leadership.
  • 2007-2008: Acquired intellectual property & marketing authorizations with TAD Italy, a generic company registered in Italy, to get an access to more than 70 ready to market products.
  • 2010-2011: Entered into licensing and supply agreements with AstraZeneca, one of the world’s leading biopharmaceutical companies to supply several solid dosage and sterile products for emerging markets.
  • 2010-2011: Agreement signed with China National Pharmaceutical Group Corporation (Sinopharm) to divest a majority stake in subsidiary company Aurobindo (Datong) Bio Pharma Co China (ADBPL).
  • 2014 -2016: Acquired certain commercial operations in Western Europe from Actavis Plc., a global, integrated specialty pharmaceutical company.
  • 2014 -2016: Acquired assets of nutritional supplement maker Natrol Inc. and other affiliate entities (Natrol) through its wholly owned subsidiary Aurobindo Pharma USA Inc. (APUSA).
  • 2014 -2016: Arrow Generiques SAS, a French subsidiary of APL announced the signing of an agreement to acquire the rights title and interest in its products Calcium and Calcium Vitamin D3 in France including the use of the OROCAL trademark from Teva Pharmaceutical Industries.
  • 2017-2018: Signed a definitive agreement to acquire dermatology and oral solids businesses from Sandoz Inc., USA.
  • 2017-2018: Signed a definitive agreement to acquire Apotex Inc’s commercial operations in 5 European countries.
  • 2017-2018: Started filing Oncology & Hormones, Dermatology and Nasal ANDAs in US.
  • 2017-2018: Acquired Generis in Portugal - Focus on differentiated technology platforms and Specialty Pharmaceuticals.
  • 2017-2018: Acquired four cell-culture derived biosimilar products from TL Biopharmaceutical AG.
  • 2018-19: Signs a definitive agreement to acquire Apotex’ Businesses in Poland, Czech Republic, the Netherlands, Spain and Belgium.
  • 2019-20: Receives USFDA Approval for Guaifenesin Extended-Release Tablets (OTC).
  • 2019-20: The company’s JV Eugia Pharma receives USFDA Approval for Methotrexate Tablets
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323

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