Motilal Oswal: Laurus Labs’ Sharp Ramp-Up In Q1 Earnings Led By Finished Dosage Forms And API 

Motilal Oswal Report

Laurus Labs Ltd.’s Q1 FY21 revenues grew at a robust rate of 77% YoY to Rs 9.7 billion (estimate Rs 7.2 billion), led by Formulations Finished Dosage Forms (FDF); 36% of sales) revenue of Rs 3.5 billion versus Rs 1.1 billion YoY.

Other active pharmaceutical Ingredient (API) (14% of sales) revenue of Rs 1.3 billion versus Rs 440 million YoY, 37% YoY growth in contract development and manufacturing organization (CDMO) (10% of sales), and 19% YoY growth in Anti-Viral API (35% of sales).

FDF sales growth was led by the execution of orders from Global Fund and The President's Emergency Plan for AIDS Relief (PEPFAR), and country-specific tenders in the antiretroviral segment; increased volumes of commercialized abbreviated new drug application (ANDA)s; and (partly) the launch of hydroxychloroquine sulfate (HCQS) in U.S.

CDMO sales growth was led by the commencement of the commercial supply of four products, in addition to better traction in existing products.

The gross margin was up 410 basis point YoY to 54.2% on a superior product mix.

The Ebitda margin expanded at a higher rate of 1,400 basis point YoY to 28.6% (estimate 20%) on better gross margins and controlled opex (as % of sales; employee cost / other expenses down 310 basis point/620 basis point YoY).

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