Aurobindo Pharma

Industry Profile  : Indian pharmaceutical sector is among fastest growing market and it is third largest market by volume and thirteen by value. It is expected that Indian pharma industry will grow with 15% CAGR in between 2015-20. The Indian pharmaceutical industry is expected to become $55 billion by value till 2020 emerging as sixth largest market by absolute size. India is largest supplier of generic drug global export with 20% by volume. 80% Anti RETROVIRAL DRUG used against AIDS all over the world are supplied by Indian companies.

India maintain its lead over China in pharmaceutical export with 11.44% year on year growth to $21.91 billion. Drug approval to indian pharma from USFDA is also increase by nearly double but with substantial inspection which is biggest problem for many Indian pharmaceutical companies now.

All due to support from govt of India the sector is thriving and surviving against global competition. The pharmaceutical sector is permitted to receive 100% FDI under automatic rout. The sector attract FDI inflows about $14 billion in between April 2000 and December 2016. Many global companies like Abbott, GSK are investing in India.

Company Profile :   One of the leading pharmaceutical manufacturing company, Aurobindo pharma founded in 1986. Today the company is operating over 100 countries, with product portfolio of therapeutic segments including antibiotic,  Anti Retroviral, cardiovascular, gastroenterology. The company is market leader in Semi synthetic Penicillin. The company is maintaining its network of subsidiary, manufacturing plant and Marketing network in China, Brazil, Japan, South Africa, UK, USA. its marketing partners include AstraZeneca and Pfizer. over 70% of its revenue are from international business.

Shareholding Pattern  :  12 Indian and one foreign promoter entities hold the company 51.87% out of which part is pledged.  12.11% held by mutual funds. Nearly half percentage is with Bank and financial institutions. The company is not famous among insurance company. Only 0.25% is held by Insurance Companies. Foreign Investors holding 21% Remaining is held by Public.

Financials and Ratios :

 2010-111011-122012-132013-142014-152015-16
Revenue4,133.124,281.455,425.10 7,110.718,095.109,166.18
Net profit593.80(42.61)495.991,172.091,516.351,619.67
Net Profit Margin14.36(0.99)9.1416.4818.7317.67
EPS18.56(1.46)17.0240.2051.9727.72
BOOK VALUE88.2785.65100.93137.65183.55116.38
Dividend Per Share211.534.502.50
Dividend Payout9.88(68.31)8.807.458.659.02
ROE23.10(1.70)16.8729.2128.2923.78
ROCE18.73(1.27)12.2222.2924.1421.94
ROA10.16(0.71)7.2613.6614.8213.57
Debt to Equity0.660.980.940.700.540.43
Asset Turnover70.7571.4679.4982.9179.1676.81

Future Prospects  :  The company is global pharmaceuticals manufacturer and marketer. just like other Pharma companies in India, auro pharma is also coming under scanner of US FDA. Recently it received observations for Hyderabad unit. Fundamental of the company is very good, but the way market is reacting is overreaction. The company is held large research facilities which is very important for pharma. though the expense on research is supposed to show as Expense on balance sheet, the cash flow from operating activities of company is strong and growing. the fact is company is investing heavily for business development and acquisition of assets.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter