Aurobindo Pharma Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹1,666.90−₹11.00 (−0.66%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

No individual risk factor stands out on this snapshot.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Constructive picture on fundamentals. Profitability, leverage and growth metrics are broadly healthy on this snapshot. That said, valuation should still be checked against direct sector peers (not just the generic P/E bands used here) before treating this as a buy signal.

Understanding the Business

Company site ↗

The 60-second version of Aurobindo Pharma Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Aurobindo Pharma Limited, a pharmaceutical company, develops, manufactures, and commercializes generic pharmaceuticals in India, the United States, Europe, and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees29,209

Annual revenue₹33,385 Cr

How does it make money?

Turns over ₹33,385 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation. Each of its 29,209 employees supports ₹1.14 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin22.2%

Net margin10.5%

Revenue / employee₹1.14 Cr

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, CIPLA LTD, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

SUN PHARMACEUTICAL IND LP/E 34.9x · ROE 14.5%

DR. REDDY S LABORATORIESP/E 31.0x · ROE 8.8%

CIPLA LTDP/E 31.8x · ROE 9.8%

DIVI S LABORATORIES LTDP/E 83.0x · ROE 17.5%

What is its competitive advantage?Little sign of one

Returns on capital of 13.5% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE13.5%

ROE9.2%

Peer median ROE14.5%

What is the outlook?

25 analysts covering the stock expect revenue to grow about 10.9% and earnings to grow about 16.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+10.9%

Est. earnings growth+16.6%

Analysts25

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +36% while net margin moved +34% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+36%

Margin effect+34%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

✗ ROE of 9.2% is weak

Quality vs. Valuation

Company Quality

72/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

67/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

26.0x

3Y Median

25.8x

40 monthly readings · mean 26.0x · range 17.2x–43.6x

Sector Median

33.3x

median of 4 sector peers

🟡Currently trading close to its 3y median of 25.8x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 22% below the peer median of 33.3x.

vs. its own history

Fair

25.8x median over 40 months · +1%

vs. sector peers

Cheap

33.3x median of 4 peers · -22%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

26.0x

P/B

2.56x

EV/EBITDA

13.1x

PEG

1.18

Dividend Yield

0.24%

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 16.2% to 22.2% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on capital is rising
ROCE has improved from 9.7% to 13.5%.
Very low debt
Debt/Equity of 0.21x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Debt is rising
Total debt is up 53% over 3 years — worth checking what it funded.
Receivables growing faster than sales
Receivables are up 59% against revenue growth of 36% — customers are taking longer to pay.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 53% over 3 years, from ₹5,286 Cr to ₹8,073 Cr.
🟡Receivables growing faster than salesFinancial
Receivables up 59% against revenue up 36% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 16.2% to 22.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 22% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹2,422 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 59% against revenue up 36%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 8% a year✓ 10.7% CAGR
Latest reported year was 16.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 20%✓ 22.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹2,422 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 11%✓ 13.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 6 neutral · 0 weak

Market Cap

₹95,910 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

26.0x

Fair

Fairly valued against the generic band

P/B Ratio

2.56x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹64

Profitable

Profitable on a per-share basis

ROE

9.2%

Moderate

Moderate capital efficiency

ROCE

13.5%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.21x

Low

Conservative leverage

Revenue Growth (YoY)

16.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

25.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.24%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹2,422 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹1,666.9

P/E (Forward)

17.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

15.2%

Good

Healthy core-business profitability

Net Margin

10.6%

Good

Strong bottom-line conversion

Current Ratio

1.81

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.03

Defensive

Steadier than the market

52W Range Position

89%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

1691.4 / 1666.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

40.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹24,617 Cr	₹28,705 Cr	₹31,378 Cr	₹33,385 Cr	+10.7%
EBITDA	₹3,997 Cr	₹6,428 Cr	₹7,190 Cr	₹7,405 Cr	+22.8%
EBITDA Margin	16.2%	22.4%	22.9%	22.2%	—
PAT (Net Profit)	₹1,928 Cr	₹3,173 Cr	₹3,486 Cr	₹3,505 Cr	+22.1%
EPS	₹32.9	₹54.16	₹59.81	₹60.34	+22.4%
ROE	7.2%	10.6%	10.7%	9.2%	—
ROCE	9.7%	14.1%	15.7%	13.5%	—
Total Debt	₹5,286 Cr	₹6,648 Cr	₹8,263 Cr	₹8,073 Cr	+15.2%
Free Cash Flow	-₹334 Cr	-₹1,127 Cr	₹1,405 Cr	₹2,422 Cr	—

🟢 Revenue has grown at 10.7% a year over 3 years.

🟢 EBITDA has grown at 22.8% a year over 3 years.

🟢 EBITDA Margin has risen from 16.2% to 22.2% over 3 years (+5.9 pts).

🟢 PAT (Net Profit) has grown at 22.1% a year over 3 years.

🟢 EPS has grown at 22.4% a year over 3 years.

🟢 ROE has risen from 7.2% to 9.2% over 3 years (+2.1 pts).

🟢 ROCE has risen from 9.7% to 13.5% over 3 years (+3.8 pts).

🔴 Total Debt has grown at 15.2% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹334 Cr to ₹2,422 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹58,502 Cr

Total Liabilities

₹20,619 Cr

Total Debt

₹8,073 Cr

Cash & Equivalents

₹7,191 Cr

Operating Cash Flow

₹5,526 Cr

Capex

-₹3,105 Cr

Shareholding (proxy)

Institutional Holding

29.3%

Insider Holding

54.8%

Corporate Actions

Next Earnings

05 Nov 2026

Dividend Rate

₹4

Ex-Dividend Date

08 Aug 2025

Analyst Consensus

Recommendations

18 Buy · 5 Hold · 4 Sell

Target Price (Mean)

₹1,747.7

+4.8% vs CMP

Target Range

₹1,270 – ₹2,000

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
CIPLA LTD	31.8x	9.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

1 positive5 general

What Aurobindo Pharma Holders Bought Into

Simply Wall Street, 18 Oct

Aurobindo Pharma shares down on three observations from USFDA

Moneycontrol.com, 31 Aug

Aurobindo Pharma AGM results: ₹4 dividend confirmed, K. Nithyananda Reddy reappointed amid dissent

scanx.trade, 15 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Aurobindo Pharma shares hit 52-week high on final USFDA approval for Perampanel tablets

TradingView, 05 Oct

Aurobindo Pharma nears all-time high, up 30% in 4 months; more upside left?

Business Standard, 29 Jun

Aurobindo Pharma USFDA Approval Sparks Rally to New 52-Week High

Alice Blue, 05 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong14.5/20

🟢Financial HealthStrong15.6/20

🟢GrowthStrong16.1/20

🟡ProfitabilityModerate7.9/15

🟡ValuationFair8.1/15

🟢RiskLow7.2/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 8% a year10.7% CAGR
✓EBITDA margin holds above 20%22.2%
✓Free cash flow remains positive₹2,422 Cr
✓Debt / EBITDA stays below 2x1.1x
✓ROCE stays above 11%13.5%