Our 11th company in the Series of Best Stocks to Buy in India for Short term 2021 is Aurobindo Pharma Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Aurobindo Pharma Limited is a pharmaceutical company. The Company is engaged in producing oral and injectable generic formulations and active pharmaceutical ingredients.
Now Let’s check the important fundamental figures of this company. This is a mid cap company with Market Cap ₹42,899cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 8.04
Sector PE Ratio: 40.64
PE Ratio of this company is low than Sector’s PE. So it’s a Good PE than the peers of this company.
PB Ratio : 1.96
Sector PB Ratio : 5.44
PB Ratio of this company is low than Sector’s PB ratio. So it’s Good PB than the peers of this company.
Dividend Yield : 0.55%
Sector Dividend Yield : 0.63%
Dividend Yield of this company is low than Sector. Dividend of this is Below Average than the peers of this company.
ROE: 24.32%
ROCE: 20.09%
ROE (Return on equity) and ROCE (Return on capital equity) is Below Average
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2021 | 28,404.97 | 5,334.84 |
| 2020 | 23,290.38 | 2,845.14 |
| 2019 | 19,721.57 | 2,364.73 |
| 2018 | 16,568.15 | 2,423.17 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2021 | 2020 | 2019 | 2018 |
| 11,472.32 | 11,939.73 | 12,378.70 | 9,260.00 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2021 , Company have 11,472.32 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2021 | 2020 | 2019 | 2018 |
| 1,455.11 | 2,950.19 | 91.87 | 424.60 |
Debt Level: AUROPHARMA’s debt to equity ratio (24.3%) is considered satisfactory.
Reducing Debt: AUROPHARMA’s debt to equity ratio has reduced from 65.8% to 24.3% over the past 5 years.
Debt Coverage: AUROPHARMA’s debt is well covered by operating cash flow (62.4%).
Interest Coverage: AUROPHARMA’s interest payments on its debt are well covered by EBIT (151x coverage).
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2021 | 51.83% | 23.70% | 9.03% | 5.64% | 9.80% |
| Mar 2021 | 51.94% | 24.37% | 8.84% | 4.40% | 10.45% |
| Dec 2020 | 51.94% | 24.99% | 9.94% | 2.67% | 10.47% |
| Sep 2020 | 51.94% | 23.01% | 11.02% | 2.64% | 11.31% |
Above table showing there is no big change in Promotor Holding which is 51.83% in June 2021. FIIs invested in June 2021 with 23.70% and retail investor is 9.80%.
Investment Checklist for Aurobindo Pharma Ltd.
- The company is currently profitable
- Earnings are forecast to grow by an average of 7.6% per year for the next 3 years
- Debt level is low and not considered a risk
- Share price has been stable over the past 3 months
- Profit margins improved or AUROPHARMA became profitable
- They have sufficient analyst coverage
- No concerning events detected
- Shareholders have not been meaningfully diluted in the past year or recently listed
- Revenue is meaningful (₹246B)
- Market cap is meaningful (₹429B)
- AUROPHARMA does not have negative shareholders equity.
- Significant insider selling over the past 3 months
- Large one-off items impacting financial results
- Unstable dividend track record
According to its historical performance we can predict stock target.
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Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 660 to 700
Target: 900 (30% Upside)
Time Horizon: 6-8 Months
Risk Profile: Low Risk (Stock is 1.88x as volatile as Nifty)
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Hope you liked Our 11th company in the Series of Best stocks to buy in India for short term 2021. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
Disclaimer: This is an Educational Initiative and is NOT registered under any SEBI regulations. All the information that we provide is just for Educational purposes and you should consult your financial adviser before taking any investment decision. Also we do NOT provide any form of Stock Tips or Advise on stocks or portfolios. My All Trades Only Education Purpose. All trades will be at your risk. You have the responsibility of any trade or any benefit or loss