Hold Laurus Labs; target of Rs 338: Sharekhan

Sharekhan recommended Hold rating on Laurus Labs with a target price of Rs 338 in its research report dated April 28, 2023.

Broker Research

May 02, 2023 / 08:33 IST

hold

26 Aug, 2025 12:21

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Sharekhan's research report on Laurus Labs

Q4FY2023 numbers were far below expectations, with sales and net profit lagging by ~10% and ~46%, respectively. Sharper-than-anticipated fall in CDMO/ custom synthesis and generic FDF revenue, an unfavorable product mix and operating de-leverage affected performance. The company expects FY2024E to be the year of consolidation, as a large purchase order – the Paxlovid supply contract – gets completed, owing to which we expect CDMO and custom synthesis revenues to decline over FY2023-FY2025E.. Yet, a strong growth in generic API and Bio businesses and a gradual recovery in generic FDF business would offset the fall in the CDMO/ custom synthesis biz; partially offset by unfavorable products mix and operating de-leverage over FY2023-FY2025E.

Outlook

Stock trades at a higher valuation of ~ 24.9x/17.7x its FY2024E/FY2025E earnings estimates as compared to ~ 21.0x/18.0 FY2024E/FY2025E estimates for its peers. Hence, we maintain Hold on Laurus with a revised PT of Rs. 338 (vs. Rs. 368 earlier).

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