Aurobindo Pharma Limited Fair Value
AUROPHARMA · Healthcare · Current price ₹1,666.9
Is Aurobindo Pharma Limited undervalued?
We estimate the fair value of Aurobindo Pharma Limited at ₹705 per share, against a market price of ₹1,680. That puts the share price about -58.0% above our estimate, at low confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 2 methods: Discounted cash flow (2-stage) (₹340), Fair multiple (P/E) (₹1,070). These methods disagree materially, so the estimate is their midpoint rather than a weighted blend, and the disagreement is part of the finding. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for Aurobindo Pharma Limited spans ₹340 to ₹1,070. That range is wide, which is the honest signal here: read the range rather than the single number. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
How we got this fair value
Every number below is part of the same estimate for Aurobindo Pharma Limited. Nothing here is a target price or a forecast of where the share price will go.
The inputs are thin or the models disagree sharply. This is our least reliable kind of estimate, so read the range rather than the single number.
Estimate range ₹340 – ₹1,070
Why this method for this business
Aurobindo Pharma is an asset-light compounder with durable moat and strong earnings power, making DCF and relative PE the most appropriate models. EV/EBITDA is less relevant due to the company's strong cash flow generation and low debt.
The models behind the number
These methods disagree materially, so the estimate is their plain midpoint rather than a weighted blend. The disagreement is itself the finding.
Intrinsic value from 2-stage discounted cash flows (primary for asset-light / normal businesses); FCFE path
- ev_ebitda is less suitable for a compounder with strong earnings power and low debt
What was missing
- Lack of analyst dispersion data for PE multiple
- Limited forward EPS estimates for precise DCF modeling
What drives it
28 inputs, grouped by how strong each claim is
- FCF_0 (normalized)
- 1,481 ₹cr
- Net debt
- 8,073 ₹cr
- Sector-median P/E
- 36.65×
- Peers used
- 18
- EPS (TTM)
- 64.09 ₹/share
- Own-history median P/E
- 15.75×
fcf_norm (median ≤5y positive)
gross debt (cash n/a)
peer-median
peer-median
computed
reconstructed (one feature, dampened — not a cap)
- Discount rate (r)
- 13.28%
- Beta
- 0.85
COE (building-block)
bottom-up industry
- Stage-1 start growth
- 5.36%
- Fade shape
- linear
- Terminal growth (g)
- 5.36%
- Stage-1 years
- 9 y
pat_cagr_5y
lifecycle Mature
macro terminal × quality premium
lifecycle Mature horizon
- Lifecycle stage
- Mature
- Quality premium
- 1.072×
- Anchor correction
- peer anchor 36.6x diverges 0.4x from 7yr own-history 15.8x (no size-comparable peer) — anchor blended 0.6 toward own-history → 24.1x
- Term: quality
- -5.1%
- Term: growth
- -22.2%
- Term: capital_allocation
- -4.4%
- Term: financial_strength
- +8.2%
- Term: history
- -10.4%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
forecast engine (L20)
moat Narrow + capital allocation
peer-anchor mismatch — deep own-history used instead
quality 45/100 (weak/erratic returns) → discount
weak ~-1% CAGR (ROCE 18% > hurdle) → discount
capital allocation: falling ROCE / weak cash generation → discount
financial strength: low leverage (D/E 0.2) → mild premium
history: market paid -35% vs sector, dampened ×0.3 (one feature, not the anchor)
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
- Path
- FCFE
- Terminal-value fraction
- 0.521
- Premium vs sector
- -30.8%
- Fair-multiple confidence
- 81%
- Fair P/E
- 16.69×
computed (D/E vs 0.8)
PV_TV / (PV_1+PV_TV)
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for Aurobindo Pharma Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 14 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on Aurobindo Pharma Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.