Laurus Labs hits new high in subdued market, surges 30% in a month

The company is scheduled to meet on April 29, 2021, to consider and approve the audited financial results of the company for the financial year ended March 31, 2021

Shares of Laurus Labs hit a new high of Rs 467.90, up 3 per cent on the BSE in intra-day trade on Friday in an otherwise subdued market. In the past one month, the stock has rallied 30 per cent on the expectation of a strong performance by the company’s formulations segment. In comparison, the S&P BSE Sensex has shed 4 per cent during the same period.

Laurus Labs on Thursday announced that the board of directors of the company are scheduled to meet on  April 29, 2021, to consider and approve the audited financial results of the company for the financial year ended March 31, 2021. The company said the board will also consider the proposal for payment of a third interim dividend for FY 2020-21 and fixation of record date for determining the eligibility of shareholders (if approved).

While announcing its Q3 results on January 28, Laurus Labs said its generic API (Active Pharmaceutical Ingredient) division recorded a healthy growth of over 100 per cent for the quarter, led by higher growth in antiretroviral (ARV) API business which in turn was led by higher volume of first-line products. The formulations business showcased a growth of over 120 per cent for the nine months ended December due to higher business from low-and middle-income countries (LMIC). Custom synthesis continues to maintain its growth trajectory with a healthy pipeline and with good visibility, the company said.

“Laurus’s Q3FY21 results were above estimates on all fronts. Laurus is well poised to follow the success story of some leading CDMO players backed by strong chemistry and integrated model. Elsewhere, formulations are expected to grow amid ramp up and new launches (e.g. TLE400) in LMIC and launches in the US. Other APIs are expected to be driven by a strong order book and capacity addition. Besides continuous improvement in the financial performances, the company is evolving as a strong vertically integrated player with a strong order book visibility, improving margin profile, strengthening return ratios and healthy free cash flow (FCF) generation,” analysts at ICICI Securities said post Q3 results update.

Laurus has seen EPS upgrades of around 250 per cent for FY22E (from EPS of Rs 7.4 per share in April 2020 to Rs 19.5 per share currently), driven by a significant ramp-up in ARV portfolio and incremental order inflows, Edelweiss Broking said in the pharma sector update.