Prabhudas Lilladher is bullish on Aurobindo Pharma has recommended buy rating on the stock with a target price of Rs 909 in its research report dated March 05, 2018.
Aurobindo received nine observations (Form 483) post USFDA visit of Unit‐IV in February 2018 and as management suggested, none of the observations were related to data‐integrity issues and were mostly on procedural aspects. We believe that ARBP will be able to address the issues raised in the observations as none of those are serious in nature and mostly are about GMP. They also do not require to generate any data to support their responses to USFDA in 15 days, post issuance of the Form‐483 observations.
Outlook
Observation 9 dealt lack of control mechanisms in changes of master production records in the system. (I thing this issue came up in other plant of Auro few years back and addressed by creating dummy interface for people who currently posting data. Also, responsibility of the data entry in the master production record was assigned to a single person and restricts access to his cabin for unauthorized people). We continue to be positive on ARBP’s prospect in US/EU generics and DTG combination drugs for tender business anti‐AIDS market. We continue our recommendation ‘BUY’ and retain TP at Rs 909.
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