Over half of the investments Aurobindo Pharma Ltd made in the past five years is now ready to deliver, Nuvama Institutional Equities said in a fresh note, as it suggested 'Buy' on the pharma stock with a higher target of Rs 1,753 against Rs 1,680 earlier. The stock closed at Rs 1,496 on Monday, having risen 25 per cent 2026 so far. Nuvama's target hints at 17.17 per cent upside over the prevailing price.  

Aurobindo is clearly at an inflection point as the company pivots into complex modalities like Pen-G, biologics CMO and biosimilars while Pen-G block, Lannett and existing European and RoW base should continue to grow, Nuvama said.

Aurobindo’s Pen-G unit particularly, Nuvama said, is a near term earnings trigger. The unit is expected to reach utilisation rate of 60–80 per cent which can trigger Rs 700 crore revenue, including Rs 240 crore PLI pay-out. 

The recently concluded Lannett M&A has the potential to reach $500 million in revenue with the added advantage of respiratory products, including
the upcoming launch of gAdvair. 

"Aurobindo’s first novel asset Adquey is also expected to be launched within the next few months and we think this drug can clock peak sales of $250–300 million. In its European business, Aurobindo clocked EUR1bn
revenue with its robust operations and this can further grow to EUR1.2bn in FY28E," Nuvama said.

The domestic brokerage said Aurobindo Pharma has proactively incurred capex of Rs 15,500 crore in the past five years, half of which is
now ready to deliver, while the rest would start delivering in FY29.

"We project revenue/PAT CAGR 15 per cent/24 per cent with 200 bps expansion in RoCE by FY28. We reiterate ‘BUY’ rating with a target of Rs1,753 (earlier Rs 1,680). The stock currently trades at 16x FY28E EPS," Nuvama said.

Meanwhile, Nuvama said Aurobindo’s China unit is expected to move from loss-making in FY26 to registering $10 million Ebitda in FY27E with strong export momentum. The company has plans to expand capacity by 3.5 times in China to service local demand as well as exports to the US and Europe. 

"Eugia 5 has started production, which can support growth in FY28E. The continued OAI at unit III however delays some launches, but US revenue from this unit has 3 per cent revenue contribution," Nuvama said.

The Biosimilar platform is seen offering long-term upside through Omalizumab and Denosumab, while the biologics CMO business has MSD manufacturing contract. 

"Meaningful biosimilar and CMO contribution can be expected in FY29E. Both these are high-margin business, hence would support margin expansion," Nuvama said.