Shares of Laurus Pharma in an otherwise weak trading day on Thursday (September 17, 2020) settled higher by 4.33% and made an intra-day high of Rs. 1425 per share on the BSE. And since the start of the year, the stock which quoted at levels of around Rs. 360 on January 1, 2020 has gained 290% since the start of the year 2020.
This is even the outperformers within the pharma segment when there has been seen across the board sell-off amid the pandemic.
Why shares of Laurus Labs are on a continuous rise?
In the previous ended quarter of FY21, net sales at the company grew almost 80% and profit also leaped more than 11 times to Rs. 172 crore as against Rs. 15 crore. And for the current quarter expectations of higher earnings are pushing the market price in the counter higher.
The AntiViral API (active pharmaceutical ingredient) portfolio showcased a strong revenue growth of 19 percent on the back of higher volumes, added the firm.
Other positive for the firm is its diversification across products including APIs, formulations and synthesis and this product mix will help the company boost its sales of API in the post-corona world.
Stock split in Laurus Labs
On April 30, the company announced a stock split plan in the counter to make it more affordable for retail investors and subsequently the stock shall turn ex-date for the 1:5 split on September 29, 2020. For the sub-division of the shares from the current face value of Rs. 10 each to Rs. 2 each, the record date has been fixed as September 30, 2020.
Brokerages' take on Laurus Pharma stock
Brokerages are bullish on the counter going forward "We believe that ongoing traction in domestic API (active pharmaceutical ingredients) space and capacity expansion in API space by 20-25 percent will aid Laurus Labs to report sustainable growth in the coming quarters," said Reliance Securities in a recent note. The brokerage replaced heavyweight Sun Pharma with Laurus Labs in its latest model portfolio.
Similar view is held by ICICI Direct that says the company is likely to benefit in the post-Covid scenario given the company's focused approach as well as integrated business model. Also, the company's continuous targeting at the products where it excels makes it an attractive bet. The brokerage maintains a 'Buy' call on the scrip with a target price of Rs 1,620 per share.