This Pharma Stock Hits New 52-week Low, Top Brokerage Says “Buy”

Markets have been moving sideways for a few sessions, even as the Sensex has seen some fall from the levels of 63,000 points. Several stocks are now witnessing a subdued trend. Here is a stock that has hit 52-week low, but, has a "buy" call from India's top brokerage firm.

Laurus Labs at a new 52-week low

The company is a pharmaceutical and biotechnology company, based out of Andhra Pradesh. It currently operates six manufacturing facilities in Vishakhapatnam, Andhra Pradesh and one facility in Hyderabad. At five of these facilities, they manufacture Drug Substances. The stock of the company has now hit a new 52-week low of Rs 375, against a 52-week high of Rs 626, hit on April 19, 2022. This means the stock of Laurus Labs has seen substantial fall from 52-week levels. The shares have been seeing a downtrend for the last few months.

Should you buy the stock now?

While we have not done any analysis on the stock, brokerage firm Motilal Oswal in its report in late Oct post the quarterly numbers of the company had recommended a "buy" on the stock. "We have cut our EPS estimates by 8%/9% for FY23/FY24 to factor in steep price erosion in ARV products, lesser tender wins in ARV formulation, and increased overall operational cost. We continue to value the stock at 23x 12M forward earnings to arrive at our target price of Rs 610," the brokerage had said. Since recommending the stock when the price was Rs 487, the shares have drifted even lower to Rs 375.

In the previous quarter, according to Motilal Oswal report, the reduced ARV business coupled with elevated operational cost dragged overall profitability for LAURUS. This was offset to some extent by a significant off-take in Synthesis segment.

Disclaimer

The stock is not a recommendation to "buy" from the author or Greynium Information Technologies Pvt Ld. The "buy" recommendation is from the brokerage house. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.