Motilal Oswal has given Buy recommendation for Laurus Labs recommended buy rating on the stock with a target price of Rs 610 in its research re with a target price of Rs. 610 in its research report issued on Oct 22, 2022
Motilal Oswal’s research report on Laurus Labs
Laurus Lab (LAURUS) reported a miss on earnings for 2QFY23, led by lowerthan-expected ARV formulation (FDF) sales. However, the Synthesis and Non-ARV API segment remained on robust growth track offsetting the weakness in ARV sales to some extent. We have cut our EPS estimates by 8%/9% for FY23/FY24 to factor in: a) steep price erosion in ARV products, b) lesser tender wins in ARV formulation, and c) increased overall operational cost. We continue to value the stock at 23x 12M forward earnings to arrive at our TP of INR610. While the performance was subdued for the quarter, LAURUS remains on track to: a) leverage its integrated capability in Synthesis segment and extend relationship with clients, b) have differentiated product pipeline in Non-ARV formulation aided by in-house API strength and c) enhance fermentation capacity and augment biologics CDMO growth prospects. Maintain BUY.
Outlook
While the performance was subdued for the quarter, LAURUS remains on track to: a) leverage its integrated capability in Synthesis segment and extend relationship with clients, b) have differentiated product pipeline in Non-ARV formulation aided by in-house API strength and c) enhance fermentation capacity and augment biologics CDMO growth prospects. Maintain BUY.