It has underperformed the market and has fallen 10 per cent in the past two weeks, as against a 0.95 per cent decline in the S&P BSE Sensex till Thursday. Moreover, it has corrected 13 per cent from its record high level of Rs 698, touched on June 29, 2021.
On Thursday, Laurus Labs reported 31.1 per cent year-on-year (YoY) growth in revenue at Rs 1,278.5 crore, mainly driven by 95 per cent YoY jump in CRAMS (contract research & manufacturing services) business to Rs 195 crore and strong traction in formulations to Rs 521 crore with growth of 48 per cent YoY. Net profit grew 40 per cent YoY at Rs 241 crore.
The company said its growth was driven by sustained strong momentum across all business segments; particularly FDF (Finished Dosage Forms) and Synthesis. The gross margins expanded 250 basis points (bp) YoY at 56.7 per cent on the back of a better product mix and improved sales from all the segments. On sequential basis, gross margins up 120 bps, however, net profit was declined 19 per cent over the previous quarter.
The management holds a positive outlook across all four businesses -- FDF, APIs, Synthesis and Bio -- and believes the outlook remains robust driven by improving demand and supported by capacity expansion plans planned.
"Revenue from other API witnessed a slowdown, and the growth is expected to restore from Q2FY22. We remain confident of maintaining a growth trajectory in the Generic API business for FY22. In addition, Laurus Bio started contributing to the revenue and would add more from Q2 FY22, with the new fermentation capacities added in recombinant food protein," the management said.
"Laurus results were below our estimates due to demand normalization in APIs. Formulations continue to witness demand for ARVs in LMIC countries and portfolio expansion in developed markets while CRAMS was driven by new clients and additional demand this quarter. Overall, outlook remains positive with improving demand and planned capacity expansions. We will get more insights post discussion with the management," ICICI Securities said in a note.
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