Laurus share price: Antique Stock Broking initiates coverage with a Buy rating and a target price of Rs 574

Laurus Labs share price today is Rs 420, up Rs 23.5 or 6%. Laurus Labs share price has moved up from Rs 359 to Rs 420 in the last one week. Antique Stock Broking says that Laurus Labs is a leading research driven manufacturing Company. With process chemistry and R&D as its core Laurus has successfully gained leadership in various (Antiretroviral) ARV APIs and formulations in Low Middle Income Countries. Laurus Labs has also made large strides into being a robust formulations player, with the formulations business growing strongly from Rs 52 mn in FY18 to Rs 8253 mn in FY20.

Antique believes that the Laurus' growth story has entered its new phase on the back of sustainably higher formulations business and custom synthesis business being on the cusp of a major growth phase. With an aggressive CAPEX program of close to 65% of its FY 20 gross block, the company can nearly double its earnings (at a high base of FY21) by FY 24. Moreover Antique also expects that the formulations business from developed regions to grow faster from FY23. Antique initiates coverage with a Buy rating and a target price of Rs 574.

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Antique said that over the past 3 years Laurus has seen an exponential growth in its FDF business led by growth in Low Middle Income Countries. The division is currently contributing close to ~36% in FY21e as against 1% in FY18.  

Anitque expects the momentum in FDF growth to continue well beyond FY 21, driven by:

(i)             low teens market share of Laurus in $1.7 Bn

(ii)            Key product launches in US in FY 23

(iii)           Introduction of new products in EU CMO Partnership

Antique said that the Synthesis business is expected to contribute 14% by FY 24, growing at a CAGR of 28% over FY 21- FY 24. With dedicated R&D centre and manufacturing unit, Laurus is well-positioned to meet all NCE drug substance and drug product needs of clients, from Intermediate to API and from small gram scale to large tons requirements with key strengths in High Potent (HiPo) APIs and chiral separations.

Antique expects Laurus to report 28% FY 21 - FY 24 EPS CAGR, led by sustained growth in existing businesses and ramp-up in new ventures (Laurus Bio).