
Why does Aurobindo propose to demerge its injectables business?


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Aurobindo Pharma will separate its injectables business and it is likely to be completed in FY22. The idea is to unlock value as injectables account for 20% of total revenues. The dichotomy is that injectables generally get a valuation globally of around 30X P/E while Aurobindo is available at 14X P/E. It could try this strategy for biosimilars too. Injectables business is estimated to double its revenues to $700 billion in 3 years.
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