Laurus Labs Ltd. share price target

Q2 revenue grew 31% YoY (+2% QoQ) led by synthesis division and other APIs; FDF revenue at record-low of Rs 1.5bn

Q1 revenue/EBITDA came in 5%/8% above consensus and grew 20%/ 15% YoY to Rs 15.4bn/Rs 4.5bn

Q4 topline growth 14% ahead of consensus as healthy CDMO, FDF and non-ARV API sales offset decline in ARV business

Inventory destocking in ARV API/FDF led to 20% YoY decline in revenue; guided to normalise from Q4

Laurus Labs (LAURUS) has agreed to acquire a 26.6% stake in ImmunoACT for a consideration of INR460m, implying enterprise value of INR1.7b. ImmunoACT currently has four CAR-T cell molecules, with one of them undergoing clinical trials. CAR-T cell is a new therapy for Leukemia/Lymphoma, with USD1.5b in worldwide sales of five commercialized products. Given that ImmunoACT products are under development, the commercialization would be subject to a successful clinical outcome. However, this represents LAURUS' entry for a potential CDMO opportunity into a new therapy space over the next 45 years....

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Laurus Labs (LAURUS) 1QFY22 earnings missed our expectations. The robust performances in the Finished Dosage Formulations (FDF) and Synthesis segments were more than offset by a muted show in the Active Pharma Ingredients (API) segment. That said, in addition to having an established business in the Anti-Retroviral (ARV) segment, LAURUS is on track to build new levers for future growth in Contract Development and Manufacturing Operations (CDMO) and Non-ARV API/Formulation. We tweak our FY22E/FY23E EPS estimate, factoring in a) moderation in the...