Laurus Labs Ltd. share price target

Laurus Labs’ revenue for Q4FY25 stood at INR 17,203 Mn., up 19.5% YoY (+21.6% QoQ), which was above our estimates led by strong growth in Custom Synthesis segment.
Adj. EBITDA came in at INR 4,206 Mn., up 74.2% YoY (+47.5% QoQ), led by margin improvement of 768bps YoY (+430 bps QoQ) to 24.4%.

Revenue/EBITDA/PAT exceeded our estimates by 8.4%/32.6%/110.3%; EBITDA margin surpassed our estimate by 440 bps

Laurus Lab (LAURUS) delivered a second consecutive quarter with betterthan-expected performance, led by healthy traction in the Formulation (FDF)/API segment. Despite softer-than-expected performance in the CDMO business during 4QFY25, the quarterly sales run rate continued its uptrend.

Laurus Labs’ revenue beat our estimates significantly due to strong growth in Custom Synthesis segment and FDF segment. EBITDA beat our estimates due to better-than-expected gross profit and Adj. PAT beat our estimates due to strong operating performance.

Revenue/EBITDA/PAT exceeded our estimates by 10.5%/46.6%/227%. EBITDA margin surpassed our estimate by 500bps

Laurus Lab (LAURUS) significantly beat our earnings estimates in 3QFY25, led by a scale-up in the CDMO segment. Commercial supplies (including launch quantities) led to strong 89% YoY growth in CDMO sales for the quarter.

Earnings miss for 2Q on our and street estimates on all fronts. Revenue/PAT came short of consensus estimates by -5%/39%

Laurus Labs’ revenue missed our estimate due to weak demand in the Generic API segment. The profitability missed our estimates significantly due to operating deleverage and lower utilization.

Laurus Lab (LAURUS) delivered largely in-line operational performance for 2QFY25. It witnessed an improving traction in the CDMO business, with a 33%/44% YoY/QoQ jump in sales for 2QFY25.

Laurus Labs (LAURUSLABS) delivered a weak Q1FY25 due to lower revenue recorded in CDMO, FDFs and Bio and outperformance in generic APIs vs. our estimates.
The API outperformed due to strong growth in oncology and other APIs. Gross margins improved, however, due to improved products mix, process improvements in large value APIs and reduced raw material costs.

Quarterly Update Q1FY25

Laurus Labs (LAURUS) posted a weak 1QFY25 due to deviation in buying of ARV formulations and deferral of some orders in the other API segment.

Laurus Labs (LAURUSLABS) met our estimates on revenue, EBITDA margins and PAT front for both Q4FY24 and FY24; however, underperformed on GPM in Q4FY24 and marginally underperformed on the same in FY24. Notably, higher value CDMO and custom synthesis segment witnessed 3.5% Y-o-Y (+11.3% Q-o-Q) rise in revenue in Q4FY24 after 4 consecutive quarters of decline seen due to waning of high base effect.

Quarterly Update Q4FY24

Laurus Labs (LAURUS) delivered better-than-expected revenue in 4QFY24.
However, EBITDA/PAT missed our estimates due to lower sales in the CDMO
segment and weak pricing in the other API segment.

BJAUT: Healthy revival but priced in; downgrade to SELL. TVSL: On a fast track raise to BUY. SBICARD: Asset quality concerns persist; downgrade to HOLD. LAURUS: Challenges galore cut to SELL. CIPLA: Healthy revenue growth, strong margins. MAHGL: Volume growth accelerating, reiterate BUY. DCBB: NII sequentially flat on high interest cost. SBILIFE: ULIP-led growth; maintains market leadership

Laurus Labs’ revenue declined 22.6% Y-o-Y (-2.4% Q-o-Q) to Rs. 11,949 Mn (vs. our estimate of Rs. 12,669, miss of 5.7%) in Q3FY24. The generic API sales declined at 9.2% Y-o-Y (-8.7% Q-o-Q) to Rs. 5,740 Mn (vs. our estimate of Rs. 6,627 Mn, a miss 13.4%) due to high base effect as anticipated with the loss of Paxlovid opportunity in the current period, that took place during Q4FY22-Q3FY23.

Fourth straight quarterly miss with upsets on all fronts; Q3 revenue/ EBITDA well short of Bloomberg consensus by 13%/79%

Quarterly Update Q3FY24