Nuvama Institutional Equities has retained its Buy rating on Aurobindo Pharma (ARBP) but revised its target price down to ₹1,485 from ₹1,677, citing a mixed Q4 performance and a cautious FY26 outlook.
The brokerage said revenue and adjusted EBITDA beat expectations, but PAT (profit after tax) missed estimates. Nuvama noted that the adjusted EBITDA margin of 22.6% was better than anticipated, reflecting effective cost control and operational efficiency.
The management has guided for single-digit growth and flat margins in FY26, while FY27 is expected to benefit from new product launches and biosimilar contributions in Europe. This could support stronger performance in the medium term.
Despite the margin outperformance, Nuvama has reduced its PAT estimates for FY26E and FY27E by 5% and 4% respectively, factoring in lower earnings visibility and conservative growth assumptions.
The report also flagged a potential future trigger in the form of a government announcement on minimum input price for PLI (Production Linked Incentive) scheme products, which could support sector margins.
Disclaimer: The views and recommendations expressed above are those of the brokerage firm. Business Upturn does not endorse or offer any investment advice.