Motilal Oswal has given Buy recommendation for Laurus Labs recommended buy rating on the stock with a target price of Rs 700 in its research with a target price of Rs. 700 in its research report issued on Apr 29, 2022

Motilal Oswal’s research report on Laurus Labs

LAURUS delivered an in line 4QFY22. Sales revived across API/Formulations (FDF) after a subdued 3QFY22. Momentum in its Synthesis business remains strong, with another record breaking sales quarter in 4QFY22. It has scaled up its capex for FY23 and FY24 to cater to future growth across segments. The management remains confident of achieving its USD1b revenue target for FY23. – We cut our FY23/FY24 EPS estimate by 2%/1.6% to factor in: a) higher revenue growth for the Synthesis/FDF business, b) reduced prices in the ARV segment, and c) greater raw material as well as Logistics cost.

Outlook

We continue to value LAURUS at 24x 12-month forward earnings to arrive at our TP of INR700. – We remain positive given its strong business outlook in the CDMO (Synthesis as well as Biotech) segment on the back of customer additions, geographical diversification, increased business from existing customers, and its product pipeline in the non-ARV segment. We reiterate our Buy rating.

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