Aurobindo Pharma: Strong prospects offset by valuation concerns

A benign pricing environment in the US and drug shortages are major triggers for the company

Since the start of this financial year (FY24), the stock of Aurobindo Pharma has been one of the top pharma gainers, enhancing investor wealth by over 68 per cent, with a third of those gains coming in the last three months.

The stock is riding on multiple triggers given its investments in the production-linked incentive or PLI scheme, biosimilars, injectables and vaccines, which should drive revenues and profits over the medium term.

Better than expected performance after the June quarter results led to a revision of earnings estimates for FY24 and FY25.

Prabhudas Lilladher Research has increased the net profit