Buy Laurus Labs; target of Rs 385: Sharekhan

Sharekhan's research repor on Laurus Labs

Q2FY2021 was yet another quarter of stellar performance for Laurus Labs (Laurus) with results beating estimates on all parameters. Sales grew 60% yoy while adjusted PAT jumped 331% yoy. The formulations business is witnessing elevated traction, which is expected to sustain going ahead. Also Laurus is expanding its formulations capacities by 80% over FY21&FY22 to support growth. Synthesis and API segments are on track for a double digit growth.

Outlook

Operating leverage, favorable mix to support OPM expansion. Strong growth prospects, visibility on earnings, healthy balance sheet and return ratios are key positives We retain a Buy recommendation with a revised PT of Rs 385.

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