Choice Equity Broking's report on Laurus Labs
We have slightly revised our estimates upward by 4.0%/2.7% for FY26E/FY27E, given the improved performance in the CDMO segment. We believe we are more optimistic compared to the street on CDMO business opportunity. Our view hinges on the following: We believe the CDMO arm is not just additive but transformational, with 110 active projects in the pipeline contributing significantly to segment growth. This recent traction aligns with higher utilization at newly built manufacturing blocks and the initial scale-up of CDMO volumes. Management has also indicated further margin improvement as the CDMO segment scales up. In light of this, we have valued Laurus using both DCF (refer to Exhibit 1) and PE multiple to determine a fair price range.
Outlook
Our PE valuation is based on a multiple of 40x on FY27E EPS (up from 37x earlier, reflecting the strategic shift towards CDMO). By averaging both DCF and PE valuations, we arrive at a target price of INR 750 and upgrade our rating to BUY.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
