Axis Securities has selected Aurobindo Pharma as its stock ‘Pick of the Week’. The stock price has risen over 190 percent from its 52-week low of Rs 281.15 hit on March 23, 2020. It hit a 52-week high of Rs 967.60 on August 10, 2020, on the BSE.Aurobindo Pharma manufactures generic pharmaceuticals and active pharmaceutical ingredients. The company’s robust product portfolio is spread over six major therapeutic/product areas encompassing Antibiotics, Anti-Retroviral, CVS, CNS, Gastroenterological, Pain management, and Anti- Allergic, supported by an outstanding research and development (R&D) set-up.Drugs shortage is expected in the US market due to disruption in pharma manufacturing supply chains and increased demand for drugs, which are being used in the management of COVID-19 patients.Axis Securities believes that Aurobindo Pharma being an export-oriented pharma company with a large drug portfolio, adequate manufacturing capacity and a strong compliance track record before USFDA is expected to get benefit due to drug shortage in the US market.The company has planned to launch 50 new products in the US market in the current financial year which is expected to drive oral-solids business. Injectable business is expected to deliver growth from FY22, led by the company’s pipeline of 80-90 products and expanded injectable capacity in the US which will come online next year.Europe business is expected to be stable with the launch of new products and improvement in COVID-19 situations, the brokerage said.Further, APIs manufacturers in India have seen strong demand as global and domestic clients have started to diversify the source of API from China to India in-order to de-risk their source of raw material.In India, the API industry size is Rs 79,800 crore that comprises Chinese import of Rs 18,900 crore (70 percent of total Import) and export of Rs 25,000 crore.In the ARV business, Aurbindo Pharma has an early mover advantage in TLD single-pill regimen, as there is a rapid transition of TLE to TLD.Axis Securities expects the company’s earnings to grow at a CAGR of 13.5 percent over FY20-FY23E.“The stock currently trades at attractive valuations of 13.1x FY22E and 11.3x FY23E earnings and EV/EBITDA multiples of 7.7x FY22E and 6.4x FY23E. We believe the current valuation has upside potential with the expectation of consistent positive revenue growth in the US each year, and strong free cash flow generation over the next two years which would help the company in becoming debt-free,” the brokerage house said.It recommends 'Buy' with a target price of Rs 940 per share.