Laurus Labs Q1 Results Review- Lower ARV Formulations, Reduced Operating Leverage Hurt Earnings: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Laurus Labs Ltd. posted a weak Q1 FY25 due to deviation in buying of anti retroviral formulations and deferral of some orders in the other active pharma ingredient segment. Lower raw material costs led to a sharp improvement in gross margin (450 basis points YoY/530 bp QoQ), offsetting the adverse impact of lower revenue in Q1.We cut our earnings estimates by 8% each for FY25/FY26 factoring in: lower off-take of ARV products,a gradual uptick in the contract development manufacturing organisation segment, anda front-loading of opex related to expanded/new facilities..We value Laurus Labs at 31 times 12 months forward earnings to arrive at our target price of Rs 505. Laurus Labs continues to implement efforts towards the CDMO capex (chemical synthesis for human drugs/animal health/crop science). Considering that exhibit/validation batches are underway, we expect commercial batches to commence over the medium term. Accordingly, the operating leverage would improve with the scaling up of batches from H2 FY25. The customer funding to the formulation facility for higher off-take further provides confidence on its efficient manufacturing capabilities. Reiterate Buy..Click on the attachment to read the full report:.Syngene International Q1 Results: Profit Falls 18%, In Line With Estimates.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Laurus Labs Q1 Results Review- Lower ARV Formulations, Reduced Operating Leverage Hurt Earnings: Motilal Oswal

The customer funding to the formulation facility for higher off-take further provides confidence on its efficient manufacturing capabilities, says the brokerages.

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Laurus Labs Q1 Results Review- Lower ARV Formulations, Reduced Operating Leverage Hurt Earnings: Motilal Oswal

The customer funding to the formulation facility for higher off-take further provides confidence on its efficient manufacturing capabilities, says the brokerages.

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