Aurobindo’s positive aura

protrade

Well-Known Member
#11
Last year Auro promised to become debt free within 3 years... but selling off a "consistently profitable" company for that and for "strategic purposes" doesn't make sense... do you have any insights/inputs, protrade sir, why this deal was hastened?
Btw your threads are consistently a food for thought and make me dig deeper (which I will in this case too)... I may or may not agree with your conclusion on LnT but your thread provided an impetus for further scrutiny.
I presented 5 reasons why L&T is an attractive buy. And 3 out of the 5 played out. Especially the point about Infrastructure being best area for stimulus. Now L&T is in much better valuation. I would suggest trimming your exposure to the stock to some extent.

The super attractive play now is Aurobindo.
 

protrade

Well-Known Member
#12
Excellent price action in Aurobindo counter over last few weeks - stock has been successfully shrugging off bear cartels, and consolidating around 890 levels.

Natrol sale has been completed, plus company has announced a vaccine manufacturing plant for their own vaccine as well as for others. This is the sort of supportive news flow that markets like.

And there are several recommendations by multiple reputed brokers, calling for 1000+ targets on this counter.

Should be very interesting in the next few days!
 

protrade

Well-Known Member
#13
The dip in Aurobindo presents interesting opportunity. The 900 calls for December are trading 30 - so buying the stock at 875, and selling 900 calls for 30 lowers your entry cost to 845! And if it does go over 900, you anyway make money; just that you are capped at 930 - which isn’t too bad.
 

protrade

Well-Known Member
#14
The dip in Aurobindo presents interesting opportunity. The 900 calls for December are trading 30 - so buying the stock at 875, and selling 900 calls for 30 lowers your entry cost to 845! And if it does go over 900, you anyway make money; just that you are capped at 930 - which isn’t too bad.
If you bought 875 and sold 900CE at 30, you would be making ₹40 on this transaction in just 13 days.

My sense is that there is enough juice left in Aurobindo - especially with the Covaxx news. So probably best trade is to hold on to Aurobindo long, and roll over option to Jan 940CE at 44. This means you are protected from current levels almost till 860.
 

protrade

Well-Known Member
#15
With expiry out of the way, Aurobindo is poised for a strong move up. If you sold Jan 940C at 44, it might be worth buying them back at 42 taking advantage of the theta decay before the weekend. And hold your long Aurobindo unhedged.

There is a potential rerating about to happen in this stock, which should drive up the price significantly - with PE increasing from 16 to 25, coupled with rapid growth in earnings - which could easily see the stock at double its current levels in just 2-3 months time.

But this is not going to be a one-way ride, and you might see a bit of stomach churning moves!
 

protrade

Well-Known Member
#16
Prabhudas Liladhar expects 17% rise in profits -
https://www.google.co.in/amp/s/www....s-719-cr-prabhudas-lilladher-6359201.html/amp

however, they seem to have completely forgotten about the Natrol sale and the ANDA applications that got approved in last 12 months.

My guess is, Aurobindo PAT, including one-time-gains will be about 200% higher than last year! That is, 3 times last year figures. Analysts are either completely clueless, or trying to talk the stock down!
 

protrade

Well-Known Member
#17
Aurobindo has managed to get approval for ₹3000 crores plus investment under Production Linked Incentive scheme.

This benefit, by itself, means that Aurobindo gets over ₹1000 crores benefit over next 10 years. Which means the growth in Aurobindo is pretty much assured!

Between the COVID vaccine play and this PLI investments, the company has transformed what was a rudimentary supplement business of Natrol, into high value high profit initiatives, with high visibility and high viability.

The implications for the company in terms of share price are excellent - and we ought to remember that the street had fairly rosy outlook towards Aurobindo even without this news.
 

protrade

Well-Known Member
#18
The price run up in Sun Pharma is excellent indicator of what one can expect from Aurobindo Pharma. At least in case of Sun Pharma, there were some negatives - like the relatively slow performance of its subsidiary Taro, and it’s decent performance in India, which was overwhelmed by the fantastic US results. Aurobindo has much higher gearing towards the US, plus it also has one time gains from Natrol sale which for some reason the street seems to have forgotten! On top of that, they have solid positive from their new COVID Vaccine deal with Covaxx, plus their big win in the Production Linked Incentive scheme. It’s quite likely that Aurobindo will end up being the largest beneficiary of the PLI scheme.

The current levels of Auro present a fantastic opportunity to get in before a substantial re-rating in the stock.
 

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