EUR 120.00 For Business Accounts Only

MOSL: Morning India (12/March/20): 1. Aurobindo Pharma (Observations at Unit 12 resolvable on robust CAPA); 2. The Ramco Cements (Volume growth to be muted, price hike remains key); 3. India Life Insurance

Morning India (12/March/20):

Today’s top research idea
Aurobindo Pharma: Observations at Unit 12 resolvable on robust CAPA

** ARBP is majorly an exports-based company with 90% of revenue derived from exports.

** The US is its major market with 46% revenue contribution, followed by Europe (25%). US revenue CAGR is expected to improve to 24% over FY19-22 (v/s 22% over FY14-19) on the back of new approvals and acquisitions. In Europe, ARBP is focusing on margin improvement by shifting the manufacturing base to India sites.

** The company has filed 572 ANDAs till Dec'19, of which 154 are pending approval, affirming the robust pipeline.

** We remain positive on ABRP but reduce our P/E multiple to 8x (from 9x) to factor in the increasing regulatory risk at sites catering to the US market. Accordingly, we revise our TP to INR530 (from INR645). Maintain Buy.

Piping hot news
SBI to foray into microfinance, may offer loans at lower interest rates
State Bank of India (SBI) has decided to enter the microfinance market that has shown immunity to economic downturn. The move by India’s largest lender is likely to roil the segment because it is planning to offer micro loans at rates lower than that is prevailing in the market nationwide through its wide network of branches.