Apotex buy may not initially contribute to Aurobindo's earnings

Unlikely to add to profits in first 2 years; working capital may rise

Aurobindo’s acquisition of Apotex’s operations in five European countries, announced on Saturday, has not been taken well by the street, as the stock lost five per cent on Monday. 

The concerns on a possible large-ticket acquisition, putting stress on the company’s balance sheet, also kept the street anxious. Analysts, however, said that while the buyout of Apotex’s operations in The Netherlands, Belgium, Spain, Poland and the Czech Republic makes business sense and has come at a reasonable price, it is unlikely to add to Aurobindo’s profits immediately. Moreover, it could weigh on its working capital, which is why the street