Buy Laurus Labs; Target Of Rs 390: ICICI Direct
ICICI Direct is bullish on Laurus Labs recommended buy rating on the stock with a target price of Rs 390 in its research report dated October 30, 2020.
Nov 4, 2020 / 09:34 PM IST
ICICI Direct's research report on Laurus Labs
Q2 revenues grew ~60% to Rs 1139 crore amid strong growth across segments driven by a 182.7% YoY jump in formulations to Rs 452 crore due to higher tender business from LMIC and new launches. API segment posted a strong growth of 22.4% YoY to Rs 571 crore amid strong traction across antiviral, oncology and other APIs. Similarly, CRAMS business grew ~35% YoY to Rs 116 crore. EBITDA margins improved 1349 bps to 32.8% (vs. 19.3% in Q2FY20) due to better product mix and improved operating leverage. Subsequently, EBITDA grew 171.3% YoY to Rs 374 crore. PAT was up 328.4% YoY at Rs 242 crore in line with an exceptional operational performance.
Besides continuous improvement in the financial performances, the company is evolving as a strong vertically integrated player with strong order book visibility, improving margin profile, strengthening return ratios and healthy FCF generation. We upgrade to BUY rating with a target price of Rs 390 (18x of FY23E EPS of 21.8).
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