Aurobindo Pharma shares gain up to 4% on commissioning four state-of-the-art manufacturing facilities

Aurobindo Pharma share price NSE, BSE: Shares of Aurobindo Pharma on the first trading day of the new fiscal year 2025 saw buying action after the company informed investors about the commencement of commercial production at four manufacturing facilities, including Penicillin G, through its wholly-owned subsidiary companies.
 
At the day’s high, the stock gained nearly 4 per cent to Rs 1,131.95 on the BSE, while it closed over 2 per cent higher at Rs 1113 per share on the BSE.

“Aurobindo Pharma Limited has commissioned four state-of-the-art manufacturing facilities for PenicillinG, 6-Amino Penicillanic Acid (6-APA), injectable products, and granulation through its wholly owned subsidiaries,” said the company’s filing with the exchanges.

The business’ revenues and profitability of the respective entities are expected to grow over a period of time, noted the company’s filing. Based on the purchase orders received, the respective companies have made commercial sale to their customers. 

Earlier on January 20, Zee Business informed that the company’s Pencillin G plant will start its operations in April. As per Zee Business research desk inputs, the plant has been built under the government’s PLI scheme with an investment of US$25 crore. The incremental sales at the company are estimated to grow to Rs 393 crore and Rs 1361 crore in FY25/ FY26, respectively, from this plant. Also, revenue and EBITDA margins are seen to log an improvement by about 9 per cent and 150 bps, respectively. 

Further with the start of the company’s injectable facility, value growth is expected in EU/emerging markets. The pellets plant will benefit from the backward integration of global formulations operation, noted the research desk. So, given the start of the plant and upcoming new launches, there is expected re-rating of the stock.

Aurobindo Pharma’s stock return

The stock of the drug manufacturer over the last one year has gained 118 per cent, more than doubling investors’ wealth.

Analysts recommendation

The consensus recommendation from 24 analysts for Aurobindo Pharma is Buy, with 12 analysts signalling ‘strong buy’ on the counter, Trendlyne data shows. The 1-year price target, however, is pegged at Rs 1166, a 5 per cent potential upside.