Aurobindo Pharma hits new high

The stock has rallied 17% against 2.8% fall in S&P BSE Sensex after acquiring Actavis' Western Europe business.

Aurobindo Pharma has moved higher by 2.7% at Rs 450, also its record high, in otherwise weak market on the Bombay Stock Exchange (BSE).

Since January 17, shares of the pharmaceutical company has outperformed the market by surging 17% after acquiring Actavis’ Western Europe business with gross consideration of Euro 30 million (about Rs 250 crore).  The benchmark S&P BSE Sensex has dropped 2.8% during the period.

The acquisition is likely to expand Aurobindo’s operations across seven countries in Western Europe and enlarge its portfolio with 1200 marketed products and 200 products in pipeline.

Meanwhile, on January 23, the company had received the final approval from the US Food and Drug Administration (USFDA) to manufacture and market Repaglinide tablets.

The market size of the product is estimated to be $274 million for the twelve months ending November 2013, it said.

Analyst at Prabhudas Lilladher maintain target price at Rs 482 as he expect robust earnings from Cymbalta (with 20% market share) to aid the optimistic scenario and maintain PE of 14x-16x valuation in the near-to-medium term.

The stock opened at Rs 438 and touched a low of Rs 431 on the BSE. A combined 7.05 million shares changed hands on the counter so far on the BSE and NSE.