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Business News/ Markets / Stock Markets/  400% up since April, Anand Rathi expects this pharma stock to soar higher
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400% up since April, Anand Rathi expects this pharma stock to soar higher

Recently Laurus has acquired 73% stake in Richcore Lifesciences (RICH), a Bengaluru based biotech company
  • Current market price of Laurus Labs share is ₹328
  • Anand Rathi gives a BUY rating to Laurus Labs with a target price of ₹424 per share in 12 months. (REUTERS)Premium
    Anand Rathi gives a BUY rating to Laurus Labs with a target price of 424 per share in 12 months. (REUTERS)

    Pharma sector is among the top performers in Indian markets this year after the coronavirus pandemic turned global investors’ spotlight on health-care companies. An Indian pharma company, Laurus Labs share has soared 404% since the beginning of current financial year. Analysts at Anand Rathi believe the stock to gain 29% more. "Based on growth visibility in Formulations as well as in the API segment, we are confident of sustaining the momentum in earnings. We also believe that the Laura Labs is well positioned for continued long term growth," says the brokerage.

    Anand Rathi gives a BUY rating to Laurus Labs with a target price of 424 per share in 12 months. Current market price of Laurus Labs share is 328.

    Laurus Labs is principally engaged in offering a broad and integrated portfolio of Active Pharmaceuticals Ingredients (API) including intermediates, Generic Finished dosage forms (FDF) and Contract Research services to cater to the needs of the global pharmaceutical industry.

    Recently Laurus has acquired 73% stake in Richcore Lifesciences (RICH), a Bengaluru based biotech company.

    Laurus has a portfolio with more than 60 commercialized APIs with strong presence in ARV, Oncology, anti-diabetic and Hepatitis C therapeutic segments. Further the company has forayed into formulation on a large scale from Unit II in FY20 resulting in major revenue being contributed from that segment i.e. about 29% in FY20 as against about 2% during FY19.

    During FY20, the company at consolidated level has achieved around 24% growth in its top-line which stood at Rs.28318 million. The growth in revenue is primarily attributable to Finished Dosage Form (FDF) segments which has increased to Rs.8253 million in FY20 from 546 million in FY19.

    Company's EBIDTA margin has improved from 15.5% during FY19 to 19% during FY20. The profitability has increased due to change in composition of revenue from API to formulations

    In order to supplement future growth, Laurus has undertaken a massive capex program (Rs12000 million) of which Rs5000 million is allocated towards formulations, to be largely funded through internal accruals.

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    Published: 12 Dec 2020, 10:45 AM IST
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