Laurus Labs shares tank on weak Q3 results; is it a good time to sell the stock?

Shares of Laurus Labs slipped as much as 10 per cent in the morning deals on Thursday (January 25) after the pharmaceutical company posted weak third quarter (October-December) results on Wednesday.

As of 10:37 a.m., shares of Laurus Labs traded 7.14 per cent, or Rs 28.45, lower on the BSE at Rs 370.1 apiece. The market capitalisation of the company at around the same time stood at Rs 19,947.13 crore.

Laurus Labs Q3 results 

On Wednesday, after market hours, the Indian pharmaceutical and biotechnology company posted a decline in profit after tax (PAT) of 88 per cent at Rs 25 crore for the December quarter against Rs 203 crore registered a year ago.

The revenue declined 22.7 per cent to Rs 1,195 crore from the quarter under review against Rs 1,545 crore a year ago.

The earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at Rs 182 crore for the quarter that ended on December 31 against Rs 404 crore, which was a decline of 55 per cent YoY. The margin of the company stood at 15.2 per cent against 26.1 per cent YoY.

As per the filing, the EBITDA margin remained compressed due to higher spending on growth projects, and overall business momentum is expected to pick up, supported by a healthy order book.

In nine months, Laurus Lab invested a total of Rs 576 crore in capex and maintained the outlook for FY24 as a consolidation year of growth.

What should investors do?

Citi maintained a 'sell' call and raised the target price to Rs 315 from Rs 280 apiece.

Jefferies continued with an 'underperform' rating and cut the target price to Rs 250 from Rs 290 apiece.

Laurus Labs share price: Past performance

In a year, the stock of Laurus Labs has gained over 7 per cent underperforming the Nifty 50's rise of over 19 per cent. 

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