Brokerage further cuts price target on Laurus Labs, see details here
1 min read 29 Mar 2023, 10:31 PM ISTThe brokerage has also cut its target price on the stock from ₹350 per share earlier to ₹295 per share.
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Brokerage firm Kotak Institutional Equities has initiated coverage on Laurus Labs Ltd and assigning a ‘reduce’ tag on the pharmaceutical stock.
The brokerage has also cut its target price on the stock from ₹350 per share earlier to ₹295 per share.
The report stated that the pharmaceutical company’s business mix is unlikely to pivot significantly towards Synthesis over the near term.
The brokerage states that the ‘Synthesis’ segment accounts for the bulk of the pharma company’s value and lends incremental comfort to its valuations. Kotak expects Laurus Labs’s Synthesis segment to contribute a whole 32 per cent to its overall fiscal year 2025 estimated sales, with an ARV staying relevant at 36 per cent.
"In our view, the business mix is unlikely to pivot significantly towards Synthesis over the near term and we expect Synthesis to contribute 32% to overall FY2025E sales, with ARV staying relevant at 36% of sales even in FY2025E. While our concerns stay largely unchanged, Laurus’ stock has corrected 43% in the past six months. At CMP, the Synthesis segment accounts for bulk of Laurus’ value, lending incremental comfort on valuations. However, the challenging near- to medium-term outlook keeps us on the sidelines. Retain REDUCE with a lower FV of Rs295 (Rs350 earlier)," said the brokerage in its report.
Laurus Labs reported 32.08 per cent rise in net profit to ₹203.04 crore from ₹153.73 crore in the year-ago period. Net revenue rose sharply by 50.16 percent to ₹1,544.82 crore compared to ₹1,028.76 crore in the same period last year, marginally higher than expectations.
On Wednesday, the company's scrip ended 2.43 per cent up at ₹296.70 on BSE.
