The company's board has also approved a second interim dividend of 125 per cent at Rs 1.25 per equity share of Re 1 for the financial year 2020-21.
Last month, Aurobindo Pharma
reached a definitive agreement to sell its US subsidiary Natrol LLC
to private equity firm New Mountain Capital and its affiliate Jarrow Formulas in an all-cash transaction valued at $550 mn (about Rs 4,048 crore). This, would make Aurobindo a zero-debt company and also help it repay loans, analysts had said.
"We believe a significant portion of the company’s current debt (Rs 4,777 crore as of Q1FY21) is working capital based. Therefore, a major portion of cash generated through this deal is likely to be utilised for strategic investments. The sale of this non-core segment is likely to improve focus on new and complex ventures such as biosimilars, vaccines and complex injectables where capital requirements are higher and precise," analysts at ICICI Securities had said in a note dated October 26.
Adding, "structurally, we remain positive on the company as it possesses one of the best, enduring generics ecosystems among peers (vertically integrated model, lower product concentration) to withstand volatility in the US and other generics space. We maintain the BUY recommendation and ascribe a target price of Rs 1,025 valuing it 14x FY23E EPS of Rs 73.3."