Aurobindo Pharma shares continue to rise for the second straight day on Thursday after the company reported 23.81 per cent rise in consolidated net profit at Rs 584.96 crore for the quarter ended June 30, 2016 against Rs 472.45 crore in the corresponding quarter a year ago. Net sales of the company jumped by 13 per cent year-on-year to Rs 3,663.91 crore for the quarter under review against Rs 3,242.29 crore in the same quarter last year. The pharma company announced its financial results on August 23 after market hours.
Reacting on the financial results, shares of the company soared 7 per cent to Rs 787.55 on Wednesday. On Thursday, the scrip gained as much as 2.16 per cent to Rs 804.60. At 1.38 pm, shares of the pharma company were trading 0.73 per cent up at Rs 793.30. Benchmark BSE Sensex was trading 94.49 points down at 27,965.45.
Brokerage firm Reliance Securities is bullish on Aurobindo Pharma shares post Q1 results. It said, “We expect acceleration in earnings and margins backed by new launches from residual approvals. Aurbindo Pharma reported positive EBITDA margin for four quarters in a row with gross margins rising by 190 basis points year-on-year yoy to 56.1 per cent, translating into higher EBITDA (up 188bps). At current market, shares of the company offer an attractive entry point. We assign ‘Buy’ recommendation on the stock with a target price of Rs 981.”
Another brokerage house Sharekhan is also positive on the further movement of Aurobindo Pharma with a target price of Rs 945. Sharekhan in a research note said, “We see consistent strong traction in Aurobindo Pharma’s US base business and better profitability on account of niche product launches in the future. Consequently, we have raised our price target to Rs 945 by valuing the stock at 16x FY2018E EPS.”