1.

Input -->
P&L assumptions

Selected Case 1

FY16 FY17 FY18

INR in Crores Actual Actual Actual
Revenue 13,955 15,090 16,500
Revenue gowth 8.1% 9.3%

Case 1
Case 2
Case 3

Cost of materials consumed (6,162.1) (6,434.3) (6,752.7)

% sales 44.2% 42.6% 40.9%

Case 1
Case 2
Case 3

Employee Benefits (1,542.6) (1,767.8) (2,130.8)

% sales 11.1% 11.7% 12.9%

Case 1
Case 2
Case 3

Other operating expenses (3,062.4) (3,453.6) (3,844.5)

% sales 21.9% 22.9% 23.3%

Case 1
Case 2
Case 3

D and A (392.4) (427.6) (558.0)

% sales 2.8% 2.8% 3.4%
Case 1
Case 2
Case 3

Tax % 26% 25% 25%

Case 1
Case 2
Case 3
 Scenarios:
Case 1 Optimistic Higher than historical average
Case 2 Base Historical average
Case 3 Worst Worse than historical average

FY19 FY20 FY21 FY22 FY23 FY24

Actual Actual Actual Forecast Forecast Forecast
19,564 23,099 24,775 29,730 35,081 40,694
18.6% 18.1% 7.3% 20% 18% 16%

20% 18% 16%

15% 15% 12%
10% 10% 8%

(8,712.6) (9,735.2) (9,902.5) (11,891.8) (14,032.3) (16,277.5)

44.5% 42.1% 40.0% 40% 40% 40%

40% 40% 40%

42% 42% 42%
44% 44% 44%

(2,584.9) (3,219.2) (3,535.0) (4,162.1) (4,911.3) (5,697.1)

13.2% 13.9% 14.3% 14.0% 14.0% 14.0%

14.0% 14.0% 14.0%

15.0% 15.0% 15.5%
15.0% 15.5% 16.0%

(4,314.1) (5,279.8) (6,003.7) (6,540.5) (7,717.8) (8,952.6)

22.1% 22.9% 24.2% 22% 22% 22%

22% 22% 22%

23% 23% 23%
24% 24% 24%

(668.0) (966.7) (1,055.4) -1189.2 -1403.2 -1627.8

3.4% 4.2% 4.3% 4.0% 4.0% 4.0%
 4.0% 4.0% 4.0%
5.0% 5.0% 5.5%
5.0% 5.0% 5.5%

24% 24% 27% 26% 26% 26%

26% 26% 26%

26% 26% 26%
26% 26% 26%
torical average

torical average

FY25 FY26
Forecast Forecast
46,798 50,542
15% 8%

15% 8%
12% 10%
8% 8%

(18,719.1) (20,216.7)
40% 40%

40% 40%
42% 42%
44% 44%

(6,551.7) (7,075.8)
14.0% 14.0%

14.0% 14.0%
15.5% 16.0%
16.5% 16.5%

(10,295.5) (11,119.2)
22% 22%

22% 22%
23% 23%
24% 24%

-1871.9 -2021.7
4.0% 4.0%
4.0% 4.0%
5.5% 6.0%
5.5% 6.0%

26% 26%

26% 26%
26% 26%
26% 26%
 Revenue
60,000
40,000
20,000
-

COGS
46.0%
44.0%
42.0%
40.0%
38.0%
36.0%
1 2 3 4 5 6
BS assumptions

FY16 FY17 FY18

INR in Crores Actual Actual Actual
Accounts Receivable 4,606.7 2,765.3 3,080.2
DSO 120.5 66.9 68.1

Accounts Payable 2,457.0 2,488.3 2,372.9

DPO 145.5 141.2 128.3

Inventory 4,056.1 4,330.5 5,858.4

DIO 240.3 245.7 316.7

CCC 215.2 171.4 256.5

Property, plant and equipment 3,380.4 4,083.1 4,736.6

% of sales 24% 27% 29%

Effect of Days of Inventory Outstanding on Cash Conversion Cycle

350.0

300.0

250.0

200.0

150.0

100.0

50.0

-
FY16 FY17 FY18 FY19 FY20
Actual Actual Actual Actual Actual

DIO CCC
 FY19 FY20 FY21 FY22 FY23 FY24
Actual Actual Actual Forecast Forecast Forecast
3,415.0 4,315.2 3,503.3 4,479.8 5,286.2 6,131.9
63.7 68.2 51.6 55.0 55.0 55.0

2,677.1 2,794.7 2,576.1 3,909.6 4,613.4 5,351.5

112.2 104.8 95.0 120.0 120.0 120.0

7,245.6 7,699.9 9,026.6 9,350.6 11,033.7 12,799.0

303.5 288.7 332.7 287.0 287.0 287.0

255.1 252.1 289.4 222.0 222.0 222.0

5,693.7 6,494.8 6,886.6 8,027.0 10,194.3 12,844.8

29% 28% 28% 27% 27% 26%

n Cash Conversion Cycle

FY19 FY20 FY21

Actual Actual Actual
 FY25 FY26
Forecast Forecast
7,051.7 7,615.9
55.0 55.0

6,154.2 6,646.6
120.0 120.0

14,718.9 15,896.4
287.0 287.0

222.0 222.0

16,184.4 20,230.5
26% 25%
2.Output -->
P&L

FY16 FY17
INR in Crores Actual Actual
Net Revenues 13,955 15,090
Cost of goods sold (6,162) (6,434)
Gross Margin 7,793 8,656
Employee benefits expenses (1,543) (1,768)
Other expenses (3,062) (3,454)
EBITDA 3,188 3,434
D&A (392) (428)
EBIT 2,796 3,007
Taxes (734) (746)
Tax rate 26% 25%
Net Operating Profit After Taxes (NOPAT)
2,061.5 2,260.4

EBITDA (
14,000

12,000

10,000

8,000

6,000

4,000

2,000

-
FY16 FY17 FY18 FY19 FY20 FY
Actual Actual Actual Actual Actual Act
1.0
 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Actual Actual Actual Actual Forecast Forecast Forecast
16,500 19,564 23,099 24,775 29,730 35,081 40,694
(6,753) (8,713) (9,735) (9,902) (11,892) (14,032) (16,278)
9,747 10,851 13,363 14,872 17,838 21,049 24,416
(2,131) (2,585) (3,219) (3,535) (4,162) (4,911) (5,697)
(3,845) (4,314) (5,280) (6,004) (6,540) (7,718) (8,953)
3,772 3,952 4,864 5,333 7,135 8,419 9,767
(558) (668) (967) (1,055) (1,189) (1,403) (1,628)
3,214 3,284 3,898 4,278 5,946 7,016 8,139
(811) (772) (936) (1,171) (1,546) (1,824) (2,116)
25% 24% 24% 27% 26% 26% 26%

2,402.4 2,511.8 2,961.1 3,107.2 4,400.0 5,192.0 6,022.7

EBITDA (cr)

FY20 FY21 FY22 FY23 FY24 FY25 FY

Actual Actual Forecast Forecast Forecast Forecast Fore
 FY25 FY26
Forecast Forecast
46,798 50,542
(18,719) (20,217)
28,079 30,325
(6,552) (7,076)
(10,296) (11,119)
11,231 12,130
(1,872) (2,022)
9,360 10,108
(2,433) (2,628)
26% 26%

6,926.1 7,480.2

FY25 FY26
Forecast Forecast
Balance Sheet

FY16 FY17 FY18

INR in Crores Actual Actual Actual
Beginning PP&E 3,380 4,083
Depreciation (392) (428) (558)
Capex 1,130 1,211
Ending Value (PPE) 3,380 4,083 4,737

Accounts Receivable 4,607 2,765 3,080

Inventory 4,056 4,331 5,858
Accounts Payable 2,457 2,488 2,373
Working capital 6,206 4,608 6,566
Changes in working capital (1,598) 1,958
 FY19 FY20 FY21 FY22 FY23 FY24
Actual Actual Actual Forecast Forecast Forecast
4,737 5,694 6,495
### 6,887 8,027 10,194
(668) (967) (1,055)
### (1,189) (1,403) (1,628)
1,625 1,768 1,447
### 2,330 3,571 4,278
5,694 6,495 6,887
### 8,027 10,194 12,845

3,415 4,315 3,503

### 4,480 5,286 6,132
7,246 7,700 9,027
### 9,351 11,034 12,799
2,677 2,795 2,576 3,910 4,613 5,352
7,983 9,220 9,954 9,921 11,706 13,579
1,418 1,237 733 (33) 1,786 1,873
 FY25 FY26
Forecast Forecast
12,845 16,184
(1,872) (2,022)
5,212 6,068
16,184 20,231

7,052 7,616
14,719 15,896
6,154 6,647
15,616 16,866
2,037 1,249
Cash Flow
.
FY17 FY18
INR in Crores Actual Actual
Net Operating Profit After Taxes (NOPAT) 2,260 2,402
Add: D&A 428 558
Gross Cash Flow 2,688 2,960
Less: Capex (1,130) (1,211)
Less: Investment in Working Capital 1,598 (1,958)
Net Cash Flow 3,156 (209)

Net Cash Flow

3,293
3,156

1,982

1,499 1,
1,239
923

(209) 137
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 F
Actual Actual Actual Actual Actual Forecast Forecast Forecast For
 FY19 FY20 FY21 FY22 FY23 FY24
Actual Actual Actual Forecast Forecast Forecast
2,512 2,961 3,107 4,400 5,192 6,023
668 967 1,055
### 1,189 1,403 1,628
3,180 3,928 4,163 5,589 6,595 7,650
(1,625) (1,768) (1,447) (2,330) (3,571) (4,278)
(1,418) (1,237) (733) 33 (1,786) (1,873)
137 923 1,982 3,293 1,239 1,499

2,185

1,499 1,550
1,239

FY23 FY24 FY25 FY26

t Forecast Forecast Forecast Forecast
 FY25 FY26
Forecast Forecast
6,926 7,480
1,872 2,022
8,798 9,502
(5,212) (6,068)
(2,037) (1,249)
1,550 2,185
DCF Valuation

WACC 10.76%
Terminal Growth 5.0%

FY17 FY18
INR in Crores Actual Actual
Net Cash Flow 3,156 (209)
Discount factor
Present Value

DCF value 7,426.7 cr.

Conitnuing Value (Terminal value) 39,842.0 cr.
Present value of CV 23,904.0 cr.
Enterprise value 31,330.7 cr.
Less
Debt 4,971.1 cr.
Add
Non Operating Assets 696.2 cr.
27,055.8 cr.
Shares outstanding 58.50 cr.
Intrinsic value per share 462.5
 FY19 FY20 FY21 FY22 FY23 FY24
Actual Actual Actual Forecast Forecast Forecast
137 923 1,982 3,293 1,239 1,499
0.90 0.82 0.74
2,973 1,010 1,103

24%
31,330.7 3% 4% 5%
76% 8.8%
9.8%
10.8%
11.8%
12.8%

-30% potential upside

 FY25 FY26
Forecast Forecast
1,550 2,185
0.66 0.60
1,030 1,311

6% 7%
 Cost of Capital

Key Inputs:
Total Equity to Capital
Net Debt to Capital

Calculations:
Risk Free Rate
Equity Beta
Market Risk Premium
Cost of Equity

Pre-tax cost of debt

Marginal Tax Rate
Cost of Debt

Weighted Cost of Equity

Weighted Cost of Debt

Weighted Average Cost of Capital

Shares outstanding
Share price
Market Cap

Debt

Distribution of Debt and Equity

Total Equity to Capital Net Debt to Capital
 Date AUROPHARMA
st of Capital Closing Price
3/1/2017 658.93
4/1/2017 592.13
5/1/2017 560.32
88.63% 6/1/2017 668.11
11.37% 7/1/2017 702.76
8/1/2017 709.26
9/1/2017 676.40
6.40% 10/1/2017 743.24
0.78 11/1/2017 677.57
6.42% 12/1/2017 674.21
11.38% 1/1/2018 616.98
2/1/2018 601.64
8.00% 3/1/2018 547.65
26.00% 4/1/2018 630.26
5.92% 5/1/2018 546.13
6/1/2018 596.00
7/1/2018 580.73
10.08% 8/1/2018 699.72
0.67% 9/1/2018 730.84
10/1/2018 777.08
10.76% 11/1/2018 795.88
12/1/2018 720.68
1/1/2019 774.62
58.5 cr. 2/1/2019 700.13
662.60 3/1/2019 772.41
38762 cr. 4/1/2019 806.69
5/1/2019 662.25
4971 cr. 6/1/2019 598.87
7/1/2019 562.63
on of Debt and Equity 8/1/2019 591.63
9/1/2019 580.11
10/1/2019 462.76
11/1/2019 443.11
 12/1/2019 451.22
1/1/2020 475.47
2/1/2020 499.27
3/1/2020 409.46
4/1/2020 620.25
5/1/2020 738.98
6/1/2020 764.80
7/1/2020 866.78
to Capital Net Debt to Capital 8/1/2020 801.67
9/1/2020 790.53
10/1/2020 766.86
11/1/2020 862.04
12/1/2020 915.77
1/1/2021 899.81
2/1/2021 850.06
3/1/2021 877.49
4/1/2021 976.61
5/1/2021 993.63
6/1/2021 961.03
7/1/2021 912.64
8/1/2021 724.15
9/1/2021 723.22
10/1/2021 687.84
11/1/2021 658.81
12/1/2021 734.35
1/1/2022 634.45
2/1/2022 670.75
 AUROPHARMA
Nifty 50 monthly Nifty 50
Closing Price return monthly return
9173.75
9304.05 -10% 1%
9621.25 -5% 3%
9520.90 19% -1%
10077.10 5% 6%
9917.90 1% -2%
9788.60 -5% -1%
10335.30 10% 6%
10226.55 -9% -1%
10530.70 0% 3%
11027.70 -8% 5%
10492.85 -2% -5%
10113.70 -9% -4%
10739.35 15% 6%
10736.15 -13% 0%
10714.30 9% 0%
11356.50 -3% 6%
11680.50 20% 3%
10930.45 4% -6%
10386.60 6% -5%
10876.75 2% 5%
10862.55 -9% 0%
10830.95 7% 0%
10792.50 -10% 0%
11623.90 10% 8%
11748.15 4% 1%
11922.80 -18% 1%
11788.85 -10% -1%
11118.00 -6% -6%
11023.25 5% -1%
11474.45 -2% 4%
11877.45 -20% 4%
12056.05 -4% 2%
12168.45 2% 1%
11962.10 5% -2%
11201.75 5% -6%
8597.75 -18% -23%
9859.90 51% 15%
9580.30 19% -3%
10302.10 3% 8%
11073.45 13% 7%
11387.50 -8% 3%
11247.55 -1% -1%
11642.40 -3% 4%
12968.95 12% 11%
13981.75 6% 8%
13634.60 -2% -2%
14529.15 -6% 7%
14690.70 3% 1%
14631.10 11% 0%
15582.80 2% 7%
15721.50 -3% 1%
15763.05 -5% 0%
17132.20 -21% 9%
17618.15 0% 3%
17671.65 -5% 0%
16983.20 -4% -4%
17354.05 11% 2%
17339.85 -14% 0%
17560.20 6% 1%
3.Sources -->
Income Statement
INR (cr)

Particulars Mar-16 Mar-17 Mar-18

Revenue from operations 13,955 15,090 16,500
Operating expenses - - -
Cost of materials consumed (4,826) (5,185) (5,629)
Purchase of stock-in-trade (1,429) (1,559) (1,606)
Change in inventory 93 309 483
Employee benefits expenses (1,543) (1,768) (2,131)
Other expenses (3,062) (3,454) (3,845)
Total operating expenses (10,767) (11,656) (12,728)
EBITDA 3,188 3,434 3,772
Depreciation and amortisation expenses (392) (428) (558)
EBIT 2,796 3,007 3,214
Other income 204 116 102
Share of profit of joint ventures (net of tax) 1 5 3
Finance costs (257) (67) (78)
Exceptional Items - - -
Profit before tax 2,744 3,061 3,241
Tax expense (721) (760) (818)
Profit after tax / Net profit 2,024 2,301 2,423
 Mar-19 Mar-20 Mar-21
19,564 23,099 24,775
- - -
(7,445) (7,725) (8,317)
(1,943) (2,112) (2,315)
676 102 730
(2,585) (3,219) (3,535)
(4,314) (5,280) (6,004)
(15,612) (18,234) (19,441)
3,952 4,864 5,333
(668) (967) (1,055)
3,284 3,898 4,278
155 192 381
3 (15) (55)
(263) (305) (74)
(88) (26) 2,815
3,091 3,743 7,344
(727) (899) (2,010)
2,365 2,844 5,334
Balance Sheet
INR (cr)

Particulars Mar-16 Mar-17 Mar-18

ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 3,380.4 4,083.1 4,736.6
Capital work-in-progress 835.9 1,237.4 1,399.5
Goodwill 406.3 406.3 816.6
Intangible Assets 393.0 344.4 967.6
Intangible assets under development 12.2 220.7 183.5
Investments 122.9 245.9 80.7
Investments (using Equity method) 0.0 0.0 230.8
Loans 5.5 5.7 5.4
Trade Receivables 0.0 0.0 0.0
Other Financial Assets 53.6 75.2 86.8
Deferred Tax Assets (net) 206.3 167.8 158.8
Non-current Tax Assets (net) 44.8 58.0 82.6
Other non-current assets 165.0 198.9 174.0
Total Non-Current Assets 5,625.9 7,043.2 8,922.9

CURRENT ASSETS
Inventories 4,056.1 4,330.5 5,858.4
Trade receivables 4,606.7 2,765.3 3,080.2
Cash and cash equivalents 790.4 489.4 1,214.0
Bank balances 9.9 24.0 48.3
Investments 0.0 0.0 0.0
Loans 10.3 10.9 8.7
Current Tax assets 4.3 17.5 64.6
Other Financial Assets 49.2 757.7 1,109.9
Assets held for sale 0.0 0.0 0.0
Other current assets 767.5 810.8 794.2
Total Current Assets 10,294.4 9,206.2 12,178.2

TOTAL ASSETS 15,920.2 16,249.4 21,101.0

Particulars 42,795.0 42,795.0 43,160.0

LIABILITIES
NON-CURRENT LIABILITIES
Equity share capital 58.5 58.6 58.6
Other equity 7,228.8 9,313.3 11,621.8
Non-controlling interest 2.6 2.1 1.8
LT Debt 742.8 181.4 451.2
Other financial liabilities 0.0 0.0 0.0
LT Provisions 23.4 22.4 55.9
Other long - term liabilities 0.0 0.0 10.6
Deferred Tax Liabilities (net) 24.0 49.3 235.3
Total Non-Current Liabilities 8,080.0 9,627.1 12,435.2

CURRENT LIABILITIES
ST Debt 3,672.7 2,902.7 4,031.3
Trade payables 2,457.0 2,488.3 2,372.9
Other financial liabilities 1,495.0 1,042.3 1,504.5
ST Provisions 50.9 63.4 197.3
Other current liabilities 82.6 99.2 462.9
Current Tax Liabilities (net) 82.0 26.5 97.0
Total Current Liabilities 7,840.2 6,622.3 8,665.9
Liabilities of disposal group
TOTAL LIABILITIES 15,920.2 16,249.4 21,101.0
0.0 0.0 0.0
 Mar-19 Mar-20 Mar-21

5,693.7 6,494.8 6,886.6

1,341.9 1,621.8 2,428.9
832.5 915.9 428.9
1,948.7 1,985.7 2,058.1
326.5 364.1 632.6
112.6 145.1 336.5
247.6 409.6 94.7
6.5 5.8 7.3
1.2 0.0 0.0
89.4 117.0 143.3
183.3 163.2 452.7
138.1 84.5 128.3
167.9 207.6 432.7
11,089.9 12,515.2 14,030.5

7,245.6 7,699.9 9,026.6

3,413.8 4,315.2 3,503.3
1,883.7 2,763.7 5,373.5
73.5 78.4 100.8
0.0 0.0 159.8
10.3 13.7 14.3
34.6 15.8 79.0
1,363.5 40.1 33.9
0.0 0.0 83.6
1,339.7 1,485.8 1,448.8
15,364.5 16,412.5 19,823.5

26,454.4 28,927.7 33,854.0

43,525.0 43,891.0 44,256.0

58.6 58.6 58.6

13,832.2 16,766.1 21,871.3
1.6 0.1 -0.9
180.0 0.0 168.4
 0.0 264.4 320.3
46.5 74.7 157.1
11.3 87.5 39.5
281.3 291.7 574.6
14,411.5 17,543.1 23,188.8

6,573.2 5,422.3 4,802.7

2,677.1 2,576.1 2,794.7
1,661.5 2,238.7 2,129.3
180.9 416.6 171.9
884.0 635.9 556.2
66.3 95.1 210.4
12,042.9 11,384.6 10,665.2

26,454.4 28,927.7 33,854.0

0.0 0.0 0.0
Company P/E Price Market Cap (Cr) EV/EBITDA
Sun Pharma 33.3 894.0 214525.0 48.5
Cipla 29.7 946.1 76368.5 16.4
Dr Reddy's Labs 27.4 4352.0 72440.0 19.1
Biocon 67.1 391.7 47051.5 104.7
Torrent Pharma 37.3 2682.9 45447.9 20.0
Alkem Lab 23.6 3514.0 42038.3 15.3
Aurobindo Pharma 7.5 662.6 38762.1 11.7
Median 29.7 19.1

Aurobindo Pharma
FY21 EBITDA 5333.4 cr
FY21 EPS 91.2

From EV/EBITDA
Calculated EV 101601.3 Cr
Debt 4971.1 Cr
Cash 5373.5 Cr
Equity Value 91256.7 Cr
NOSH 58.5 Cr
 CMP
662.60

Valuation as per Industry low

EV/EBITDA P/E
Value/Share 1221.71 2155.39
Potential Upside 84.38% 225.29%

Valuation as per Industry Median

EV/EBITDA P/E
Value/Share 1559.94 2711.56
Potential Upside 135.43% 309.23%