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Laurus Labs Q1 Review - Beats Estimates; Progressing Well On Diversification: Motilal Oswal

Laurus Labs Q1 Review - Beats Estimates; Progressing Well On Diversification: Motilal Oswal

<div class="paragraphs"><p>Metformin pills move through a sorting machine at a Laurus Labs Ltd. pharmaceutical plant in Visakhapatnam, Andhra Pradesh, India. (Soruce: Company website)</p></div>
Metformin pills move through a sorting machine at a Laurus Labs Ltd. pharmaceutical plant in Visakhapatnam, Andhra Pradesh, India. (Soruce: Company website)

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Motilal Oswal Report

Laurus Labs Ltd. delivered better-than-expected Q1 FY23 performance fueled by strong growth momentum in the synthesis (contract development and manufacturing organisation) segment.

The company is on track to incur capex in synthesis/bio division/non-antiretroviral formulation to cater to business growth over the next three-five years.

We have tweaked our earnings per share estimates by down 4%/down 3% for FY23/FY24 to factor in higher tax rate. We expect 34% earnings CAGR over FY22-24.

Laurus Labs has delivered 34% earnings CAGR over FY17-22. We believe that it is well placed to sustain the pace of earnings growth by building capabilities as well as capacities to attract:

  1. new customers as well as increase business from existing customers in the CDMO segment, and

  2. non-ARV business as well as bio-division.

Interestingly, the funding requirement for capital investment from internal accruals provides comfort on the balance sheet health.

Click on the attachment to read the full report:

Motilal Oswal Laurus Labs Q1FY23 Result Update.pdf

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