Aurobindo Pharma
BSE SENSEX
35,697
S&P CNX
10,458
11 March 2020
Update | Sector: Healthcare
CMP: INR450
TP: INR530 (+18%)
Buy
Observations at Unit 12 resolvable on robust CAPA
Minimal risk on future growth as no ANDAs pending for approval from Unit 12
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
ARBP IN
586
263.6 / 3.7
838 / 390
-5/-24/-36
2084
48.1
Financials Snapshot (INR b)
Y/E MARCH
2020E 2021E 2022E
Sales
233.3 299.8 316.8
EBITDA
48.8 63.9 66.5
Adj. PAT
27.3 37.0 38.2
EBIT Margin (%)
16.5 16.6 16.3
Cons. Adj. EPS (INR)
46.6 63.1 65.1
EPS Gr. (%)
8.0 35.4
3.2
BV/Sh. (INR)
280.6 341.2 402.8
Ratios
Net D:E
0.7
0.6
0.4
RoE (%)
18.0 20.3 17.5
RoCE (%)
12.0 13.3 12.3
Payout (%)
5.4
4.0
5.4
Valuations
P/E (x)
9.6
7.1
6.8
EV/EBITDA (x)
7.6
5.9
5.3
Div. Yield (%)
0.6
0.6
0.8
FCF Yield (%)
-21.9
0.2 10.4
EV/Sales (x)
1.6
1.2
1.1
Shareholding pattern (%)
As On
Dec-19 Sep-19 Dec-18
Promoter
51.9
51.9
51.9
DII
13.2
13.0
14.4
FII
21.4
22.0
20.1
Others
13.5
13.2
13.6
FII Includes depository receipts
Stock Performance (1-year)
Aurobindo Pharma
Sensex - Rebased
920
780
640
500
360
The USFDA inspected Aurobindo Pharma’s (ARBP) Unit 12 from 10 to 21 Feb’20
and issued form 483 with six observations. The regulator has pointed out
microbiological contamination, lack of training, inadequate analysis of out-of-
specifications, and deficiency in handling of complaints, among others. We believe
that these issues are resolvable on undertaking robust actions for 3-6 months.
There are no ANDAs pending for approval from this site. Further, most existing
products at Unit 12 are also approved to be manufactured in Unit 16. Unit 12
accounts for 3-4% of US sales as a single-source facility, in our view.
We remain positive on ARBP and expect 15% earnings CAGR over FY19-22, led by its
robust ANDA pipeline and addition of the Sandoz business. However, increasing
regulatory concerns (primarily after revocation of Unit 4 classification) prompt us to
cut our P/E multiple to 8x (prior: 9x) and revise our TP to INR530.
th
th
Highlights of Unit 12 form 483
The USFDA inspected ARBP’s Unit 12 as part of cGMP compliance and issued form
483 with six observations: (1) Inadequate measures to prevent contamination of
environment, equipment and product by personnel or environmental condition,
which could potentially affect product quality. Specific remarks were made on flow
of materials, qualification of clean rooms and procedure to control operator access
to clean rooms. (2) Procedures to prevent microbial contamination not established.
(3) Lack of education/training. (4) Inadequate root cause analysis for reported out-
of-specifications. (5) Issues with handling of complaints. (6) Non-establishment of
sensitivity of test methods. We expect these issues to be resolved within 3-6
months post robust CAPA. Note that this site was last inspected in Mar’18 and
classified as VAI.
Unit-12 contributes ~3-4% of US sales as single-source facility
ARBP manufactures penicillin (orals and injectables) at Unit 12. All 20 ANDAs filed
from this site are already approved (no pending approvals). Further, most existing
products at Unit 12 are also approved to be manufactured at Unit 16. We thus see
minimum regulatory risk for ARBP. Unit 12 accounts for 3-4% of US sales as a
single-source facility.
Increasing regulatory risk at key sites over past 12-15 months
Over the past one year, nine sites have been inspected by the USFDA. Units 1, 11
and 7 have been classified as Official Action Indicated (OAI) and Unit 9 has been
issued a warning letter recently. Units 5 and 8 were inspected in Oct’19 and
classified as VAI. Recently, there has been revocation of inspection classification at
Unit 4 and thus we await further clarity from a compliance perspective.
Valuation and view
A strong ANDA pipeline (154 pending for approval), potential synergy benefit post
closure of Sandoz acquisition, and operating leverage for EU business are reasons
for our positive stance on ARBP. However, we 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 (prior: INR645). Maintain
Buy.
Tushar Manudhane – Research analyst
(Tushar.Manudhane@MotilalOswal.com); +91 022 6129 1536
Hitakshi Chandrani – Research analyst
(Hitakshi.Chandrani@motilaloswal.com); +91 22 6129 1557
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Aurobindo Pharma
Exhibit 1: Inspection history and unit-wise ANDA filings
Site
Unit XII
Unit IV
Unit VIII
Unit V
Unit VII (SEZ)
Unit III
Unit I
Unit IX
Unit XI
APL Healthcare
Aurolife &
Aurolife - I
Eugia
Silicon
AuroNext
Unit VIB
Unit X
Auropeptide
Total
API/Formulation
Penicillin Oral & Injectables
Injectables & Ophthalmics
API
API
Oral Formulations
Oral Formulations
API
API
Intermediate facility
Oral Formulations
Oral Formulations
Oral & Injectable Formulations
API
Penem Injectables
Cephalosphorins Oral
Oral Formulations
API
21
7
2
11
7
391
1
137
115
14
10
18
2
FA
20
63
47
TA
UR
Total Remarks
Inspected in Feb’20. Received form 483 with six
20
observations.
The company has received form 483 with 14
observations in Nov’19. USFDA recently revoked
110
classification of inspection and indicated
inspection to be open and still under review.
The company has received a 'Form 483' with four
observations in Oct’19.
The company has received a 'Form 483' with four
observations in Oct’19.
The company has received a 'Form 483' with
169
seven observations in Sep’19. Inspection
classified as OAI.
The company has received a 'Form 483' with 10
127
observations in Jun’19.
Inspected in Feb’19. Inspection classified as OAI.
Inspected in Feb’19. Issued warning letter.
Inspected in Feb’19. Inspection classified as OAI.
12
Inspected in Dec’18. EIR in place.
Inspection closed with VAI classification in
33
Jun’18.
27
Inspected in Jun’18. EIR in place.
Inspected in Mar’18. EIR in place.
2
Inspected in Feb’18. EIR in place.
12
Inspected in Sep’17. EIR in place.
51
Inspected in Apr’17. Zero 483.
Inspected in Aug’16. EIR in place.
572
Source: Company, USFDA, MOFSL
12
12
19
2
27
1
42
154
Exhibit 2: Unit-XII inspection history
Plant
Unit XII
Time of inspection
Feb-20
Mar - 18
Jun -15
Remarks
Issued form 483 with 6 observations
Classified as VAI
Classified as VAI
Source: MOFSL, Company, Industry
11 March 2020
2
 Motilal Oswal Financial Services
Aurobindo Pharma
Story in charts
Exhibit 3: Expect sales CAGR of 17% over FY19-22
Formulations (INR b)
API (INR b)
35
32
29
111
FY16
30
120
FY17
30
34
42.0
25.8
135
FY18
162
201
265
280
34
FY14
48
FY15
61
FY16
12.3
68
FY17
FY18
74
9.0
44.9
21.3
90
29.6
117
170
2.3
37
94.2
173
Exhibit 4: Sandoz portfolio to boost US business
US formulations (INR b)
YoY growth (%)
29
54
FY14
27
96
FY15
FY19 FY20E FY21E FY22E
Source: Company, MOFSL
FY19 FY20E FY21E FY22E
Source: Company, MOFSL
Exhibit 5: Margins to improve gradually
Gross Margins (%)
55.5
54.6
55.8
57.4
59.1
EBITDA Margins (%)
55.8
57.2
57.5
57.6
Exhibit 6: Expect EBITDA CAGR of 25% over FY19-21
EBITDA (INR b)
165.1
EBITDA growth (%)
28.2
12.3
21.2
22.8
22.8
23.0
20.6
20.9
21.3
21.0
22.8
25.6
FY15
24.4
7.7
10.3
6.2
21.2
31.0
4.2
31.9
FY16
34.3
FY17
37.9
FY18
40.2
48.8
63.9
66.5
FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E
Source: Company, MOFSL
FY14
FY19 FY20E FY21E FY22E
Source: Company, MOFSL
Exhibit 7: R&D expense to remain in similar range
R&D expense (INR b)
4.5
4.0
4.0
3.6
2.6
3.0
4.0
4.3
Exhibit 8: Expect EPS CAGR of ~15% over FY19-22
EPS (INR)
3.1
2.6
FY14
3.2
FY15
4.1
FY16
5.4
FY17
6.7
FY18
8.7
9.3
12.0
13.6
22.7
FY14
27.0
FY15
34.6
FY16
39.3
FY17
42.7
FY18
43.2
46.6
63.1
65.1
FY19 FY20E FY21E FY22E
Source: Company, MOFSL
FY19 FY20E FY21E FY22E
Source: Company, MOFSL
11 March 2020
3
 Motilal Oswal Financial Services
Aurobindo Pharma
Financials and Valuations
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
Total Expenditure
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Current Tax
Deferred Tax
Tax Rate (%)
Less: Minority Interest
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Deferred Liabilities
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
FY14
80,998
38.3
58,170
22,828
28.2
3,125
19,703
1,079
232
18,856
-2,031
16,825
3,635
0
21.6
-38
13,228
13,228
350.1
16.3
FY15
1,21,205
49.6
95,569
25,636
21.2
3,326
22,310
843
808
22,275
-596
21,679
5,966
0
27.5
-45
15,758
15,758
19.1
13.0
FY16
1,39,553
15.1
1,07,671
31,882
22.8
3,924
27,958
927
701
27,733
-304
27,429
7,207
0
26.3
-30
20,252
20,251
28.5
14.5
FY17
1,50,897
8.1
1,16,556
34,341
22.8
4,276
30,065
667
538
29,936
621
30,557
7,596
0
24.9
-55
23,015
23,015
13.6
15.3
FY18
1,64,998
9.3
1,27,113
37,885
23.0
5,580
32,305
777
1,020
32,548
-168
32,380
8,183
0
25.3
-34
24,231
25,021
8.7
15.2
FY19
1,95,636
18.6
1,55,416
40,219
20.6
6,680
33,540
1,627
1,157
33,070
-2,183
30,887
7,269
0
23.5
-29
23,647
25,288
1.1
12.9
FY20E
2,33,256
19.2
1,84,505
48,750
20.9
10,326
38,424
2,245
700
36,879
-519
36,361
9,482
0
26.1
-54
26,933
27,316
8.0
11.7
FY21E
2,99,776
28.5
2,35,924
63,852
21.3
14,029
49,824
2,825
650
47,649
0
47,649
10,721
0
22.5
-55
36,983
36,983
35.4
12.3
(INR M)
FY22E
3,16,833
5.7
2,50,298
66,535
21.0
14,906
51,629
3,107
640
49,161
0
49,161
11,061
1
22.5
-55
38,154
38,154
3.2
12.0
(INR M)
FY22E
586
2,35,412
2,35,998
17
1,040
1,08,027
3,45,081
1,74,987
57,559
1,17,427
18,825
13,419
3,602
2,40,335
1,21,456
76,387
17,492
25,000
48,528
35,902
12,000
626
1,91,807
3,45,081
FY14
583
36,919
37,502
257
2,054
36,339
76,151
41,066
14,613
26,453
764
3,097
198
64,386
23,675
26,366
1,786
12,559
18,747
13,512
3,877
1,358
45,640
76,151
FY15
584
50,975
51,559
258
2,058
38,636
92,511
53,821
17,405
36,416
640
4,196
198
87,647
36,113
35,392
4,691
11,451
36,587
20,511
13,650
2,426
51,060
92,511
FY16
585
72,288
72,873
26
-1,823
44,155
1,15,230
41,312
3,455
37,856
4,063
8,359
1,230
1,05,631
40,561
46,067
8,003
11,001
41,909
24,570
15,776
1,563
63,722
1,15,230
FY17
586
93,133
93,719
21
-1,185
30,841
1,23,397
53,650
7,168
46,482
4,063
12,374
2,459
95,439
43,305
35,042
5,135
11,957
37,420
24,883
11,415
1,123
58,019
1,23,397
FY18
586
1,16,218
1,16,804
18
765
44,825
1,62,413
70,719
11,843
58,876
8,165
13,995
3,115
1,25,312
58,584
38,721
12,616
15,390
47,051
26,274
18,209
2,568
78,260
1,62,413
FY19
586
1,38,322
1,38,908
16
980
67,532
2,07,436
97,987
18,298
79,689
8,325
13,419
3,602
1,57,676
72,456
47,336
19,572
18,312
55,275
26,771
26,230
2,274
1,02,400
2,07,436
FY20E
586
1,63,790
1,64,376
16
1,000
1,12,049
2,77,441
1,44,987
28,624
1,16,362
18,825
13,419
3,602
1,69,697
80,687
60,710
3,299
25,000
44,465
31,840
12,000
625
1,25,232
2,77,441
FY21E
586
1,99,308
1,99,894
17
1,020
1,13,925
3,14,856
1,59,987
42,653
1,17,333
18,825
13,419
3,602
2,15,488
1,15,188
73,917
1,383
25,000
53,813
41,188
12,000
625
1,61,676
3,14,856
11 March 2020
4
 Motilal Oswal Financial Services
Aurobindo Pharma
Financials and Valuations
Ratios
Y/E March
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Inventory (Days)
Debtor (Days)
Creditor (Days)
Working Cap. (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Debt/Equity
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest / Dividend received
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(inc)/dec in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from Investments
Change in networth
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY14
22.7
28.1
64.3
1.5
6.6
19.7
15.9
6.9
3.7
13.0
0.3
-1.4
41.6
23.3
24.2
217
93
117
193
3.4
18
0.9
FY15
27.0
32.7
88.3
2.3
8.3
16.5
13.6
5.1
2.4
11.5
0.5
5.1
35.4
20.4
20.9
198
91
113
177
2.4
26
0.7
FY16
34.6
41.3
124.5
2.0
5.8
12.9
10.8
3.6
2.1
9.3
0.4
-0.5
32.5
20.4
22.8
227
107
134
200
2.5
30
0.5
FY17
39.3
46.6
160.0
2.5
6.4
11.4
9.6
2.8
1.9
8.4
0.6
27.0
27.6
19.0
22.5
238
98
140
196
2.6
45
0.3
FY18
42.7
52.2
199.4
2.5
6.0
10.4
8.5
2.2
1.8
7.7
0.6
-12.3
23.8
17.4
20.4
275
82
138
219
2.7
42
0.3
FY19
43.2
54.6
237.1
2.5
6.2
10.3
8.2
1.9
1.6
7.7
0.6
-20.8
19.8
14.4
16.9
277
80
112
245
2.9
21
0.3
FY20E
46.6
64.2
280.6
2.5
5.4
9.6
6.9
1.6
1.6
7.6
0.6
-97.5
18.0
12.0
13.3
280
85
107
257
3.8
17
0.7
FY21E
63.1
87.1
341.2
2.5
4.0
7.1
5.1
1.3
1.2
5.9
0.6
0.7
20.3
13.3
14.0
281
82
105
258
4.0
18
0.6
FY22E
65.1
90.6
402.8
3.5
5.4
6.8
4.9
1.1
1.1
5.3
0.8
46.2
17.5
12.3
13.2
321
87
105
303
5.0
17
0.4
(INR M)
FY22E
51,629
14,906
640
-11,061
-14,022
42,092
0
42,092
-15,000
27,092
0
-15,000
-5,898
-3,107
-2,051
75
-10,981
16,111
1,383
17,493
FY14
19,703
3,125
232
-3,635
-13,533
5,893
-2,031
3,863
-4,656
-793
-25
-4,681
-910
2,131
-1,079
-875
1,253
520
-298
2,085
1,786
FY15
22,310
3,326
808
-5,966
-2,515
17,963
-596
17,367
-14,389
2,978
0
-14,388
2,298
-843
-1,314
-214
-73
2,905
1,786
4,691
FY16
27,443
3,924
689
-7,326
-10,794
13,936
262
14,198
-14,475
-277
23
-14,452
6,033
-835
-1,616
-16
3,566
3,312
4,691
8,003
FY17
30,608
4,276
384
-7,737
6,110
33,641
-856
32,786
-16,942
15,844
-929
-17,870
-17,279
-568
-1,372
1,436
-17,784
-2,868
8,003
5,134
FY18
32,305
5,580
1,020
-8,183
-12,760
17,962
-168
17,795
-25,011
-7,217
657
-24,355
13,982
-777
-1,465
2,302
14,042
7,482
5,135
12,616
FY19
33,540
6,680
1,157
-7,269
-17,184
16,923
-2,183
14,740
-26,916
-12,176
487
-26,429
22,704
-1,627
-1,465
-968
18,645
6,955
12,616
19,572
FY20E
38,424
10,326
700
-9,482
-39,104
865
-519
346
-57,500
-57,154
0
-57,500
44,517
-2,245
-1,465
74
40,882
-16,272
19,572
3,299
FY21E
49,824
14,029
650
-10,721
-38,361
15,421
0
15,421
-15,000
421
0
-15,000
1,877
-2,825
-1,465
75
-2,338
-1,917
3,299
1,383
11 March 2020
5
 Motilal Oswal Financial Services
Aurobindo Pharma
NOTES
11 March 2020
6
 Motilal Oswal Financial Services
Aurobindo Pharma
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
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 Motilal Oswal Financial Services
Aurobindo Pharma
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The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
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