Stock Fundamentals

Sweet deal for Aurobindo Pharma

Dhuraivel Gunasekaran | Updated on September 10, 2018 Published on September 09, 2018


The stock of Aurobindo Pharma rose 12 per cent last week, reacting to news that the company has entered into an agreement with Sandoz Inc, US, to acquire its dermatology and oral solids businesses for a cash consideration of $900 million.

The acquisition enhances Aurobindo’s product offerings and provides it a market-leading dermatology franchise, comprising a portfolio of generic and branded products. The deal is expected to add approximately 300 products to Aurobindo’s existing portfolio.

The acquisition will enhance Aurobindo’s pipeline — a total of 487 ANDA filings as on June 2018. The company has guided for sales of $900 million in the first 12 months. The acquisition will be fully funded by debt. The company’s net debt-to-equity ratio of 0.4 may increase to around 0.6 due to the acquisition. Despite the rise in the stock price, valuations are not expensive at around 19 times trailing earnings.


Read further by subscribing to

The Hindu Businessline

What You'll Get

  • Web + Mobile

    Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device.

  • Exclusive portfolio stories and investment advice

    Gain exclusive market insights from the Hindu Businessline's research desk.

  • Ad free experience

    Experience cleaner site with zero ads and faster load times.

  • Personalised dashboard

    Customize your preference and get a personalized recommendation of stories based on your intrest.

This article is closed for comments.
Please Email the Editor