ARBP’s top line grew 12% YoY to Rs 37bn in 1QFY17, led by 19% growth in US business (45% of revenues). EBITDA margin improved 30bps sequentially to 23.9% (+203bps YoY) with superior business mix. EU operations (27% of revs) benefited from sourcing efficiencies, operating leverage and new products. Reported PAT increased 35%YoY to Rs 5.8bn.

Valuation: ARBP trades at 15.1x FY18E EPS, a yawning 25-30% discount to sector averages. This is understandable, given the purely generic nature of the business mix. With improving profitability and free cash flows, this gap can reduce. Resume coverage with BUY rating and a TP of Rs 925 (18x FY18E EPS).