l
BSE SENSEX
40,116
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
Aurobindo Pharma
CMP: INR433
TP: INR500 (+15%)
Buy
13 November 2019
2QFY20 Results Update | Sector: Healthcare
S&P CNX
11,840
ARBP IN
Sales uptrend continues led by US/Europe; regulatory
586
headwinds remain
253.9 / 3.5
Superior execution in US/acquisition contribution drive revenues:
Sales
838 / 428
were up 18% YoY to INR56b (our estimate: INR54.2b) in 2QFY20, largely led
-11/-41/-58
by the US (+27.3% YoY to INR28b) and Europe (+21.2% YoY to INR14b). New
1994
launches, higher sales in existing products and also sales from acquired
48.1
FY21E
296.6
63.2
36.1
61.7
31.3
340.2
19.9
13.3
7.0
1.3
Financials & Valuations (INR b)
FY19 FY20E
Y/E Mar
195.6
236.4
Net Sales
40.2
49.6
EBITDA
25.3
27.5
PAT
43.2
47.0
EPS (INR)
1.1
8.9
Gr. (%)
237.1
281.0
BV/Sh (INR)
19.8
18.1
RoE (%)
14.4
12.1
RoCE (%)
10.0
9.2
P/E (x)
1.8
1.5
P/BV (x)
Estimate change
TP change
Rating change
entity provided momentum during the quarter. Growth markets grew at a
subdued rate of 3.8% YoY to INR3b, while ARV/API sales were down
2.5%/1.3% YoY to INR2.4b/INR8b.
Reduced operating leverage hurts margins:
Gross margin expanded 70bp
YoY to 57.7% due to a favorable mix (product/geographical). However,
EBITDA margin shrank 80bp YoY to 20.8% (in-line) due to higher staff
cost/other expenses (+90bp/+100bp YoY). EBITDA grew 14% YoY to
INR11.7b (in-line). ARBP incurred a forex loss of INR272m in the quarter. Adj.
PAT increased marginally to INR6.7b (our estimate: INR6.3b) due to an
increase in the tax rate.
For 1HFY20, revenue/EBITDA/PAT were up 23%/28%/12% YoY at
INR110b/INR23b/INR12b.
Concall highlights:
(1) Substantial queries related to the Sandoz deal have
been addressed. Approval from FTC is likely in the next few weeks. (2) ARBP
is yet to get clearance from the USFDA for filing through the CB30 route for
Valsartan. (3) It is in process of sending a response with CAPA completion
w.r.t units 11, 1 and 9. (4) R&D spend to be 4-4.5% of sales for FY20. (5)
Eugia business prospects are likely to improve in FY21 led by new launches.
Valuation view:
We cut our EPS estimate for FY20 by 5% to INR47 to factor
in the delay in the closure of the Sandoz transaction. We reduce our P/E
multiple to 8x (prior: 10x) to factor in regulatory headwinds and revise our
TP to INR500 (prior: INR590) on a 12M forward earnings basis. While we
remain positive on ARBP based on the limited price erosion in the base
business and the robust ANDA pipeline (incl. complex generics), regulatory
issues may remain an overhang over the near term. Maintain
Buy.
(INR Million)
FY20E
2QE vs Est
54,195 3.3%
14.1
11,273 3.6%
20.8
2,500
650
150
8,273 9.3%
0
8,273 4.4%
2,027
24.5
-20
6,266 2.1%
6,266 6.8%
-5.5
11.6
Quarterly performance (Consolidated)
Y/E March
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
Forex loss/(gain)
Exceptional (expenses)/income
PBT
Tax
Rate (%)
Minority Interest
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
1Q
42,503
15.5
7,792
18.3
1,545
295
437
6,389
682
5,707
1,155
20.2
-3
4,555
5,095
-2.8
12.0
FY19
FY20E
FY19
FY20E
2Q
3Q
4Q
1Q
2Q
3QE
4QE
47,514 52,697 52,923 54,446 56,005 57,881 68,083 1,95,636 2,36,415
7.1
21.5
30.7
28.1
17.9
9.8
28.6
18.6
20.8
10,260 10,864 11,304 11,464 11,675 12,097 14,411
40,219
49,647
21.6
20.6
21.4
21.1
20.8
20.9
21.2
20.6
21.0
1,637 1,631 1,866 2,409 2,433 2,500 3,592
6,680
10,934
354
477
501
499
409
450
886
1,627
2,245
263
134
323
110
206
190
194
1,157
700
8,532 8,891 9,259 8,666 9,038 9,337 10,127
33,070
37,169
397
-505
28
-48
272
0
0
603
224
-268
-250 -1,062
-127
-128
-1,581
-255
7,866 9,145 8,169 8,587 8,638 9,337 10,127
30,887
36,690
1,754 2,048 2,311 2,278 2,244 2,428 2,618
7,269
9,567
22.3
22.4
28.3
26.5
26.0
26.0
25.9
23.5
26.1
-2
-26
4
-47
-1
-18
12
-29
-54
6,114 7,123 5,854 6,357 6,395 6,928 7,497
23,647
27,177
6,632 6,925 6,636 6,415 6,691 6,928 7,497
25,288
27,530
-15.1
5.5
22.6
25.9
0.9
0.0
13.0
1.1
8.9
14.0
13.1
12.5
11.8
11.9
12.0
11.0
12.9
11.6
Tushar Manudhane – Research analyst
(Tushar.Manudhane@MotilalOswal.com); +91 022 6129 1536
Hitakshi Chandrani – Research analyst
(Hitakshi.Chandrani@motilaloswal.com); +91 22 6129 1557
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Aurobindo Pharma
Other key highlights
ARBP filed 20 ANDAs, taking cumulative filings to 569. ARBP launched 10
products in 2QFY20, including three injectables.
Pricing in Sartans category has been stable over the past two quarters.
Without Apotex, Europe business grew at 6% YoY in CC terms. With Apotex,
Europe business grew at 26% YoY in CC terms.
With Apotex integration, ARBP is gaining healthy traction in newer markets of
Belgium, Poland, and Czech and would be integrating the Netherlands over the
near term.
While R&D spend would be lower at 4-4.5% for FY20, it would increase in
coming years to develop complex drugs including biosimilars and depo
injectable.
Net debt for the company decreased QoQ from USD593m to USD522m due to
lower working capital requirement. Total debt reduction has been ~USD200m in
1HFY20 and ARBP is on track with its guidance of reducing debt by USD150-
200m for FY20.
Capex for the quarter was USD58m.
Total sales (INR b)
15.2
10.2
18.5
12.8 12.1 10.6
(3.8) (2.4)
17.6
% YoY growth
11.0 11.2 15.6 7.1
21.5
30.7 28.1
17.9
Exhibit 1: Overall sales grew 18% YoY
33.6 35.3 37.9 37.7 37.7 39.1 36.4 36.8 44.4 43.4 40.5 42.5 47.5 52.7 52.9 54.4 56.0
Source: Company, MOFSL
Exhibit 2: US business grew by a strong 27.3% YoY
US sales (INR b)
17.8 11.1
21.0
(1.4) (0.5)
% YoY growth
27.4
42.7 42.3
27.3
Exhibit 3: ARBP filed for 20 ANDAs during the quarter
ANDAs filed
ANDAs approved
9.4 5.8 11.5 6.1
17.4 17.5 16.4 16.9 21.0 19.1 17.4 18.9 22.3 24.3 24.8 26.9 28.4
Source: Company, MOFSL
Source: Company, MOFSL
13 November 2019
2
 Motilal Oswal Financial Services
Aurobindo Pharma
Exhibit 4: Sales run-rate remains on an uptrend
EU sales (INR b)
36.9 37.0
10.4
-7.6
48.2
30.7
3.9
16.1
10.3 13.9
21.2
% YoY growth
11.2 11.6
-1.5
-14.9
7.7 7.8 7.6 6.3 7.7 7.7 8.0 7.5 8.2 9.2 9.2 7.3 8.1
Exhibit 5: API sales down 1.3% YoY
API sales
% YoY growth
19.7
0.4 -1.3
4.8
5.8
20.4
14.7
-2.1 -1.3
7.8
6.6 10.3
8.1 8.6
9.2 11.1 11.7 11.5 12.0 11.6 12.9 13.1 13.9 14.0
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 6: Gross margin and EBITDA margins +70bp/-80bp YoY
EBITDA margin (%)
24.6
22.9
21.2
58.7
56.2
22.9
59.3
25.2
60.1
23.7
58.1
19.9
58.8
55.1
18.3
Gross margin (%)
21.6
20.6
21.4
21.1
57.8
20.8
57.7
56.8
57.0
54.6
56.5
Source: Company, MOFSL
13 November 2019
3
 Motilal Oswal Financial Services
Aurobindo Pharma
Operating metrics
Exhibit 7: Operating metrics
2QFY18
Revenue Mix (%)
Formulations
ARV form.
US generic form.
EU and ROW form.
APIs
Revenue Growth (%)
Formulations
ARV form.
US generic form.
EU and ROW form.
APIs
As % of sales
Raw material
Staff cost
Other expenses
Tax Rate
Margins (%)
Gross Margins
EBITDA Margins
PAT margins
82.6
4.7
47.3
30.6
17.4
17.6
22.0
(25.5)
21.0
37.0
0.4
39.9
11.7
19.7
26.5
60.1
25.2
17.6
3QFY18
82.3
5.5
44.0
32.8
17.7
11.0
14.1
(30.1)
9.4
36.3
(1.3)
41.9
12.5
18.3
26.5
58.1
23.7
15.1
4QFY18
80.2
3.7
42.9
33.6
19.7
11.2
12.8
(43.3)
5.8
39.7
4.8
41.2
14.4
19.9
18.8
58.8
19.9
13.4
1QFY19
82.4
3.7
44.5
34.3
17.6
15.6
14.7
(36.4)
11.5
31.0
19.7
44.9
14.0
18.8
20.2
55.1
18.3
12.0
2QFY19
82.8
5.1
46.9
30.8
17.2
7.1
7.4
17.6
6.1
7.9
5.8
43.0
13.2
17.7
22.3
57.0
21.6
14.0
3QFY19
82.5
5.3
46.2
31.0
17.5
21.5
21.8
17.7
27.4
14.9
20.4
45.4
12.3
16.9
22.4
54.6
20.6
13.1
4QFY19
82.7
5.5
46.9
30.3
17.3
30.7
34.6
96.2
42.7
17.6
14.7
43.5
13.5
17.3
28.3
56.5
21.4
12.5
1QFY20
86.6
5.9
49.4
31.3
13.4
28.1
34.6
104.7
42.3
17.1
(2.1)
42.2
14.3
17.9
26.5
57.8
21.1
11.8
2QFY20
85.6
4.2
50.6
30.7
14.3
17.9
21.8
(2.5)
27.3
17.5
(1.3)
42.3
13.9
19.0
26.0
57.7
20.8
11.9
Source: Company, MOFSL
Valuation and view
We lower our EPS estimate for FY20 by 5% to INR47 to factor in the delay in the
closure of the Sandoz transaction. We reduce our P/E multiple to 8x (prior: 10x) to
factor in regulatory headwinds and revise our TP to INR500 (prior: INR590) on a 12M
forward earnings basis. While we remain positive on ARBP based on the limited
price erosion in the base business and the robust ANDA pipeline (which includes
complex generics), regulatory issues may remain an overhang over the near term.
Maintain
Buy.
Exhibit 8: P/E band (x)
40.0
30.0
20.0
10.0
0.0
P/E (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
Exhibit 9: P/B band
7.0
6.0
5.0
4.0
3.0
P/B (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
29.4
20.1
14.1
3.2
8.1
5.8
4.2
2.9
1.5
1.0
8.2
2.0
1.0
0.0
1.5
Source: Company, MOFSL
Source: Company, MOFSL
13 November 2019
4
 Motilal Oswal Financial Services
Aurobindo Pharma
Story in charts
Exhibit 10: Expect sales CAGR of 23% over FY19-21
Formulations (INR b)
API (INR b)
Exhibit 11: Sandoz portfolio to boost US business
US formulations (INR b)
94.2
35
YoY growth (%)
25
34
FY13
29
54
FY14
27
96
FY15
29
111
FY16
30
120
FY17
30
135
FY18
34
32
48.1
42.0
25.8
68
12.3
74
9.0
21.3
90
33.1
38.4
162
204
262
18
FY13
34
FY14
48
FY15
61
FY16
FY17
FY18
120
166
FY19 FY20E FY21E
FY19 FY20E FY21E
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 12: Margins to improve gradually
Gross Margins (%)
48.9
55.5
54.6
55.8
57.4
EBITDA Margins (%)
59.1
55.8 57.8 57.5
Exhibit 13: Expect EBITDA CAGR of 25% over FY19-21
EBITDA (INR b)
165.1
41.1
24.4
23.4
27.2
EBITDA growth (%)
28.2
14.7
21.2
22.8
22.8
23.0
12.3
20.6
21.0
21.3
8.6
22.8
FY14
25.6
FY15
31.9
FY16
7.7
10.3
6.2
34.3
FY17
37.9
FY18
40.2
49.6
63.2
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E
Source: Company, MOFSL
FY13
FY19 FY20E FY21E
Source: Company, MOFSL
Exhibit 14: R&D expense to increase led by development of
complex molecules
R&D expense (INR b)
6.0
3.5
3.6
4.0
4.5
5.0
Exhibit 15: Expect EPS CAGR of ~20% over FY19-21
EPS (INR)
3.1
2.6
3.0
2.1
FY13
2.6
FY14
3.2
FY15
4.1
FY16
5.4
FY17
6.7
FY18
8.7
11.8
17.8
5.0
FY13
22.7
FY14
27.0
FY15
34.6
FY16
39.3
FY17
42.7
FY18
43.2
47.0
61.7
FY19 FY20E FY21E
FY19 FY20E FY21E
Source: Company, MOFSL
Source: Company, MOFSL
13 November 2019
5
 Motilal Oswal Financial Services
Aurobindo Pharma
Financials and valuations
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
Total Expenditure
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Current Tax
Deferred Tax
Tax Rate (%)
Less: Minority Interest
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY14
80,998
38.3
58,170
22,828
28.2
3,125
19,703
1,079
232
18,856
-2,031
16,825
3,635
0
21.6
-38
13,228
13,228
350.1
16.3
FY15
1,21,205
49.6
95,569
25,636
21.2
3,326
22,310
843
808
22,275
-596
21,679
5,966
0
27.5
-45
15,758
15,758
19.1
13.0
FY16
1,39,553
15.1
1,07,671
31,882
22.8
3,924
27,958
927
701
27,733
-304
27,429
7,207
0
26.3
-30
20,252
20,251
28.5
14.5
FY17
1,50,897
8.1
1,16,556
34,341
22.8
4,276
30,065
667
538
29,936
621
30,557
7,596
0
24.9
-55
23,015
23,015
13.6
15.3
FY18
1,64,998
9.3
1,27,113
37,885
23.0
5,580
32,305
777
1,020
32,548
-168
32,380
8,183
0
25.3
-34
24,231
25,021
8.7
15.2
FY19
1,95,636
18.6
1,55,416
40,219
20.6
6,680
33,540
1,627
1,157
33,070
-2,183
30,887
7,269
0
23.5
-29
23,647
25,288
1.1
12.9
(INR Million)
FY20E
2,36,415
20.8
1,86,768
49,647
21.0
10,934
38,713
2,245
700
37,169
-479
36,690
9,567
0
26.1
-54
27,177
27,530
8.9
11.6
FY21E
2,96,581
25.4
2,33,410
63,172
21.3
13,571
49,601
3,382
650
46,868
0
46,868
10,780
0
23.0
-55
36,143
36,143
31.3
12.2
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Deferred Liabilities
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
FY14
583
36,919
37,502
257
2,054
36,339
76,151
41,066
14,613
26,453
764
3,097
198
64,386
23,675
26,366
1,786
12,559
18,747
13,512
3,877
1,358
45,640
76,151
FY15
584
50,975
51,559
258
2,058
38,636
92,511
53,821
17,405
36,416
640
4,196
198
87,647
36,113
35,392
4,691
11,451
36,587
20,511
13,650
2,426
51,060
92,511
FY16
585
72,288
72,873
26
-1,823
44,155
1,15,230
41,312
3,455
37,856
4,063
8,359
1,230
1,05,631
40,561
46,067
8,003
11,001
41,909
24,570
15,776
1,563
63,722
1,15,230
FY17
586
93,133
93,719
21
-1,185
30,841
1,23,397
53,650
7,168
46,482
4,063
12,374
2,459
95,439
43,305
35,042
5,135
11,957
37,420
24,883
11,415
1,123
58,019
1,23,397
FY18
586
1,16,218
1,16,804
18
765
44,825
1,62,413
70,719
11,843
58,876
8,165
13,995
3,115
1,25,312
58,584
38,721
12,616
15,390
47,051
26,274
18,209
2,568
78,260
1,62,413
FY19
586
1,38,322
1,38,908
16
980
67,532
2,07,436
97,987
18,298
79,689
8,325
13,419
3,602
1,57,676
72,456
47,336
19,572
18,312
55,275
26,771
26,230
2,274
1,02,400
2,07,436
(INR Million)
FY20E
586
1,64,034
1,64,620
16
1,000
1,12,049
2,77,684
1,44,987
29,232
1,15,755
18,825
13,419
3,602
1,70,606
83,640
56,351
5,615
25,000
44,523
31,898
12,000
625
1,26,083
2,77,684
FY21E
586
1,98,712
1,99,298
17
1,020
1,06,176
3,06,511
1,59,987
42,803
1,17,183
18,825
13,419
3,602
2,06,854
1,05,672
69,879
6,303
25,000
53,374
40,749
12,000
625
1,53,481
3,06,511
13 November 2019
6
 Motilal Oswal Financial Services
Aurobindo Pharma
Financials and valuations
Ratios
Y/E March
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Inventory (Days)
Debtor (Days)
Creditor (Days)
Working Cap. (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Debt/Equity
FY14
22.7
28.1
64.3
1.5
6.6
19.1
15.4
6.7
3.6
12.6
0.3
-1.4
41.6
23.3
24.2
217
93
117
193
3.4
18
0.9
FY15
27.0
32.7
88.3
2.3
8.3
16.0
13.2
4.9
2.4
11.2
0.5
5.1
35.4
20.4
20.9
198
91
113
177
2.4
26
0.7
FY16
34.6
41.3
124.5
2.0
5.8
12.5
10.5
3.5
2.1
9.1
0.5
-0.5
32.5
20.4
22.8
227
107
134
200
2.5
30
0.5
FY17
39.3
46.6
160.0
2.5
6.4
11.0
9.3
2.7
1.8
8.1
0.6
27.0
27.6
19.0
22.5
238
98
140
196
2.6
45
0.3
FY18
42.7
52.2
199.4
2.5
6.0
10.1
8.3
2.2
1.7
7.5
0.6
-12.3
23.8
17.4
20.4
275
82
138
219
2.7
42
0.3
FY19
43.2
54.6
237.1
2.5
6.2
10.0
7.9
1.8
1.5
7.5
0.6
-20.8
19.8
14.4
16.9
277
80
112
245
2.9
21
0.3
FY20E
47.0
65.6
281.0
2.5
5.4
9.2
6.6
1.5
1.5
7.2
0.6
-93.6
18.1
12.1
13.4
286
80
107
258
3.8
17
0.6
FY21E
61.7
84.9
340.2
2.5
4.1
7.0
5.1
1.3
1.2
5.6
0.6
19.3
19.9
13.3
14.2
274
78
105
247
3.9
15
0.5
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest / Dividend received
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(inc)/dec in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from Investments
Change in networth
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY14
19,703
3,125
232
-3,635
-13,533
5,893
-2,031
3,863
-4,656
-793
-25
-4,681
-910
2,131
-1,079
-875
1,253
520
-298
2,085
1,786
FY15
22,310
3,326
808
-5,966
-2,515
17,963
-596
17,367
-14,389
2,978
0
-14,388
2,298
-843
-1,314
-214
-73
2,905
1,786
4,691
FY16
27,443
3,924
689
-7,326
-10,794
13,936
262
14,198
-14,475
-277
23
-14,452
6,033
-835
-1,616
-16
3,566
3,312
4,691
8,003
FY17
30,608
4,276
384
-7,737
6,110
33,641
-856
32,786
-16,942
15,844
-929
-17,870
-17,279
-568
-1,372
1,436
-17,784
-2,868
8,003
5,134
FY18
32,305
5,580
1,020
-8,183
-12,760
17,962
-168
17,795
-25,011
-7,217
657
-24,355
13,982
-777
-1,465
2,302
14,042
7,482
5,135
12,616
FY19
33,540
6,680
1,157
-7,269
-17,184
16,923
-2,183
14,740
-26,916
-12,176
487
-26,429
22,704
-1,627
-1,465
-968
18,645
6,955
12,616
19,572
FY20E
38,713
10,934
700
-9,567
-37,639
3,141
-479
2,662
-57,500
-54,838
0
-57,500
44,517
-2,245
-1,465
74
40,882
-13,957
19,572
5,615
(INR Million)
FY21E
49,601
13,571
650
-10,780
-26,710
26,332
0
26,332
-15,000
11,332
0
-15,000
-5,872
-3,382
-1,465
75
-10,644
687
5,615
6,303
13 November 2019
7
 Motilal Oswal Financial Services
Aurobindo Pharma
Corporate profile
Company description
Exhibit 1: Sensex rebased
A well integrated pharma company, Aurobindo
Pharma (ARBP) features among the top 10
companies in India in terms of consolidated
revenues. ARBP exports to over 125 countries
across the globe with more than 70% of its
revenues derived out of exports. With multiple
facilities approved by leading regulatory agencies
such as USFDA, EU GMP, UK MHRA, South Africa-
MCC, Health Canada and Brazil ANVISA, ARBP
makes use of in-house R&D for filing of patents,
Drug Master Files (DMFs), Abbreviated New Drug
Applications (ANDAs) and formulation dossiers
across the world. ARBP is among the largest filers of
DMFs and ANDAs from India.
Source: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Sep-19
Promoter
DII
FII
Others
51.9
13.0
22.0
13.2
Jun-19
51.9
13.3
22.0
12.9
Sep-18
51.9
15.0
19.1
14.0
Source: Capitaline
Exhibit 3: Top holders
Holder Name
HDFC TRUSTEE CO LTD A/C HDFC
RETIREMENT
SAVINGS
FUND-HYBRID-
EQUITY PLAN
Qualified Institutional Buyer
AMANSA HOLDINGS PRIVATE LIMITED
RELIANCE CAPITAL TRUSTEE CO LTD.A/C
RELIANCE LARGECAP FUND
% Holding
7.0
1.6
1.3
1.2
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
K Ragunathan
K Nithyananda Reddy
N Govindarajan
B Adi Reddy
Designation
Chairman & Independent Directo
Vice Chairman & Whole Time Dir
Managing Director
Company Secretary
Exhibit 5: Directors
Name
M Sitarama Murthy*
P V Ramprasad Reddy
Avnit Bimal Singh*
Savita Mahajan*
Name
M Madan Mohan Reddy
M Sivakumaran
P Sarath Chandra Reddy
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
A Mohan Rami Reddy
B S R & Associates LLP
Ernst & Young LLP
Type
Secretarial Audit
Statutory
Internal
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY20
FY21
MOSL
forecast
47.0
61.7
Consensus
forecast
48.3
55.6
Variation
(%)
-2.7
11.0
Source: Bloomberg
Source: Capitaline
13 November 2019
8
 Motilal Oswal Financial Services
Aurobindo Pharma
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
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registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
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buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
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specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
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https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
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This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
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For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
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research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
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dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
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The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
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For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
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Specific Disclosures
1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
13 November 2019
9
 Motilal Oswal Financial Services
Aurobindo Pharma
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
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This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
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nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
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instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
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in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
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securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
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The person accessing this information specifically agrees to exempt MOFSL or any of its
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accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
13 November 2019
10