AngelBrokingResearch_APL.pdf (479.2 KB)
Aurobindo pharma touching 708. Sudden fall in prices an opportunity?
Price - 708
TTM EPS - 39.42
PE - 17.90
Industry PE - 28.68
RSI (Tech Indicator) - 37
Rest fundamentals are good on Quarterly/Yearly results.
No major bad news at-least as of now.
Experts share your views
Disclosure - Invested and will accumulate further
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Indian pharma stocks seems to have very low moat. A strong company can bite the dust very next day due to adverse USFDA observations.
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Some Ray of Hope for Auro
News - Unit I, XI, IX - OAI from USFDA and Anti-trust lawsuits
Fact 1 - All these 3 Units manufacturer APIs
Fact 2 - APIs contribute 5% of Revenue
Judgement 1 - Impact of Anti-trust law suit will not be severe on immediate basis as Auro is (or must be) defending its position. Legal proceeding takes its own time.
Hence price range of 650 to 670 looks lucrative.
Disclosure - Invested and will accumulate further
Sources:-
Fact1–>https://www.aurobindo.com/wp-content/uploads/2018/11/Investor-Presentation-Nov-2018.pdf
Fact2–> https://www.aurobindo.com/wp-content/uploads/2019/03/Aurobindo_Pharma_Investor_Presentation_Mar-2019_USD.pdf
Judgement 1 --> https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/us-states-file-2nd-lawsuit-accusing-aurobindo-pharma-others-firms-for-violating-antitrust-laws/articleshow/69320715.cms
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Though readymade reports not advisable, sharing this one just to highlight some insights to review present news based risks for auro
https://www.barodaetrade.com/Upload/DownLoads/AurobindoPharma-CompanyUpdate18May19-Research.pdf
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At present - there are 3 major events which can destroy this stock
- US Anti-trust Law suit
- USFDA observations on - Unit I, XI, IX
- USFDA observations on - Unit III
No clarification from Company available.This uncertainty is plummeting the stock.
However many sell side analyst reports are positive but they cant be trusted.
Result of Law suit might have been devastating if it was against 2 or 3 companies. It is against 23 companies. USA cannot take action against all pharma players
Any Idea on Q4FY1819 - ConCall Transcript or any summary of same?
It shall throw some lights on on-going concerns,
thanks
Credit : concall thread on valuepickr
Aurobindo Pharma.pdf (130.5 KB)
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Some ray of hope for Pharma industry in general including Aurobindo… Too early to take call… But still feeling optimistic seeing number of analysts judging turn around story here
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Case of Diworsification?
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This is what I do not appreciate. Investing in totally unrelated business and that too retail. This is a red flag for me as I am invested in Aurobindo.
promoters are investing in personal capacity or Aurobindo pharm is investing the money in real estate
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Q1FY1920 - good numbers
USFDA Observations for Aurobindo pharma’s unit-7, falls 16%
Observations:
-Failure to review any unexplained discrepancy;
-Failure to consider failure of batch or components;
-Control procedures not established;
-No written procedures for production and process controls;
-Equipment and utensils not cleaned at appropriate levels;
-Procedures applicable to Quality control not thoroughly followed; and
-written production and process controls not developed in execution of production, process controls.
@hitesh2710 @swapnilyerande The observations sound serious. Your views, please?
Have been hearing about such issues in the industry for last 4 years. Why can’t these large companies get their act together, even after so many instances of such lapses by almost every player in the market!
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Failure to consider failure batch or components (Data integrity issue) is a quite serious observation.
This may result in warning letter escalating into an import alert
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