With the recent acquisition from Sandoz, APL will be able to leverage its already vertically integrated and highly efficient manufacturing base to enhance its position of the acquired portfolio in the US. It will also be able to take advantage of its existing operating infrastructure in the US. The earlier Apotex acquisition would open newer markets for APL while penetrating deeper into existing markets.
We feel investors could buy the stock at the CMP, and add on dips to the Rs 680-685 band (15x FY20E EPS) for sequential targets of Rs 820 (18x FY20E EPS) and Rs 865 (19x FY20E EPS). At the CMP of Rs 744, the stock trades at 16.4x FY20E EPS.