This Bluechip Multibagger Stock Grew 438% In 5 Yrs, Non-ARV Revenue Improves

Laurus, a large-cap multibagger company is a fully integrated player in ARV formulations. The company work with all the top 10 generic pharmaceutical companies, globally, and sell their APIs in 56 countries. Their major focus areas include anti-retroviral (ARV), Hepatitis C, and Oncology drugs. As a pharma company, Laurus' share price is gaining consistently, amid a soft market trend in the pharma segment.

The leading API manufacturer in a recent statement mentioned, "APIs, our anti-viral business during the quarter (Q1FY23) continued to witness sequential improvement and sales grew to Rs. 383 crores, while overall demand environment stays softer, we expect volumes and prices are going to stabilize around these levels."

Laurus - NSE performance

The current market price of Laurus stood at Rs. 581.50/share on NSE, down by 1.53%, till last traded, on August 19. In the last 5 days, the share price of this company has surged by 3.19% on NSE, and in the last 1 month, its share price has surged by 13.04%. In the past 6 months it has gained 7.75%, and in last 1 year its share price has fallen by 14.46%. In the long term its share growth has been impressive, in the last 5 years, stock increased by 438.73%.

The 52-week high level of this stock is Rs. 695.95, and the 52-week low level of this stock is Rs. 436.80.

Market capitalization	Current market price	5 Years performance	6 Months performance
Rs. 31,268 crore	Rs. 581	438.73%	7.75%

Stock recommendation and company growth

The current market price of Laurus is Rs. 581.50/ share, and ICICI Securities has estimated a target price for the stock at Rs. 675/share, and given a buy rating, with 16.17% potential return. It is a large cap stock with a market capitalization of Rs. 31,268 crore. Being optimistic about the stock, ICICI Securities stated, "In our healthcare coverage we like Laurus. Laurus Labs operates in the segment of generic APIs & FDFs (formulations), custom synthesis and biotechnology. Buy with target price of Rs. 675."

Financial results

Laurus Labs' consolidated net profit increased near about 5% to Rs. 252.54 crore in Q1FY23, and its capital expenditure in Q1FY23 was at Rs. 209 crore. Total income from operation for the quarter is Rs. 1539 crores against Rs. 1279 crores with a healthy growth of 20%. Gross margin for the quarter is at 57.6% almost improved like 90 bps on a better product mix. ROCE improved to 29.4% on annualized basis.

Commenting on the results, Founder and CEO Satyanarayana Chava stated, "Pricing pressure in ARV APIs and the Formulation business was significant during this quarter and ARV FDF volumes would increase in the coming quarters. The high-margin CDMO business growth helped the organisation deliver very good revenue and profit." Additionally, according to CFO V. V. Ravi Kumar, "EBITDA was at Rs. 454 crore with consistent EBITDA margins of 29.5% as better mix more than offset, depressed pricing in ARV business."

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, brokerage firm, and the author are not liable for any losses caused as a result of decisions based on the article.