Shares of Laurus Labs fell 6 percent on September 12 after Kotak Institutional Equities downgraded the stock to ‘sell’ from ‘reduce’ with an unchanged target price of Rs 300. This comes after the brokerage firm said, “After a washout 1Q FY24, Laurus’ stock rallied 20 percent likely on the ‘worst is behind’ narrative, led by anticipated traction in Synthesis”. Laurus' Synthesis segment is currently trading at a premium of more than 25 percent higher than Syngene. Considering the significant differences in their capabilities and size, the brokerage firm finds it hard to justify this premium.
At 11:05 am, shares of the company were trading 5.1 percent lower at Rs 386.05 on the BSE.
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Laurus Labs, which heavily relies on antiretroviral (ARV) active pharmaceutical ingredients (APIs) and formulations, has said that going forward it will focus on non-ARV products targeting diabetes and cardiovascular to drive growth.
Even though Synthesis is expected to achieve strong medium-term growth, it's unlikely to fully offset the slow performance of ARV until at least FY26.
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