Improving product mix (focus on formulation), rising US sales (large product pipeline), and the supply arrangement with Pfizer ($100mn+ revenue FY11 onwards) will lead to superlative growth in revenue (22%) and profitability (23%) in FY11E.
Debt concern is set to become a non-issue with Rs10bn free cash flow by FY12. Hence valuation discount to peers (trades at 5.4x FY11E v/s 14x peer avg) is unwarranted.
We recommend a BUY in the stock.
Click here to read a detailed report