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Laurus Labs Ltd. – Highlights

  • The shares of Laurus Labs Ltd. was trading at Rs.640.65, up by 5.95% in today’s trading session.
  • The stock price has increased by 305.01% in last one year, while the benchmark index S&P BSE Sensex has increased by 39.35%.
  • The stock bounced back after 3 consecutive sessions of downfall,  on the back of a positive outlook after the company has announced its financial results for Q1 FY22 on Thursday.
  • Laurus Labs reported 31.2% year-on-year (YoY) revenue growth of Rs 1,278.5 crore, primarily driven by a 95% YoY increase in CRAMS (contract research and manufacturing services) business to Rs 195 crore and strong traction in formulations to Rs 521 crore with a 48% YoY growth.
  • Net profit increased by 40% year on year to Rs 241 crore.
  • According to the company, its expansion has been fueled by sustained strong momentum across all business segments, particularly FDF (Finished Dosage Forms) and Synthesis. Gross margins increased by 250 basis points (bp) year on year to 56.7 percent, owing to a better product mix and higher sales across all segments. Gross margins increased by 120 basis points sequentially, but net profit fell by 19% over the previous quarter.
  • The management is optimistic about the future of all four businesses – FDF, APIs, Synthesis, and Bio – and believes that demand will improve, which will be aided by capacity expansion plans.
  • “Revenue from other APIs has slowed, but growth is expected to resume in Q2FY22. We are confident in continuing to grow in the Generic API business in FY22. Furthermore, with the addition of new fermentation capacities in recombinant food protein, Laurus Bio began contributing to revenue and would add more in Q2 FY22 “the management said.
  • R&D Spends came at ₹ 49 Cr (3.8% to Sales) and was up 17% YoY.
  • EBITDA increased by 41% year on year to 400 Cr. EBITDA margins were 31.3%, up 210 basis points year on year.
  • ARV business grew by a healthy 23% year on year, but declined sequentially due to demand normalisation – in line with the management’s expectations.
  • Laurus Labs is a rapidly expanding research-driven pharmaceutical company with four business lines — Generics APIs, Generics Finished Dosage Forms (FDFs), Synthesis/Ingredients, and Bio — that operate with globally benchmarked manufacturing capabilities and compliances. It is a leading manufacturer of APIs for antiretrovirals (ARVs), oncology, cardiology, anti-diabetics, anti-asthma, and other therapeutic segments.

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Disclaimer: This document and the process of identifying the potential of a company has been produced for only learning purposes. Since equity involves individual judgments, this analysis should be used for only learning enhancements and cannot be considered to be a recommendation on any stock or sector.

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