Laurus Labs Q1 Results: Profit Rises By More Than 10 Times, Shares Gain 16%

Drugmaker Laurus Labs Ltd.’s quarterly profit rose by more than 10 times year-on-year, leading to a 16% rally in its share price.

The company’s net profit rose by around 1,047% year-on-year to Rs 172 crore in the quarter ended June, it said in an exchange filing. It attributed the boost to profit to its performance across segments. Its other financial metrics, too, registered similar large jumps.

• Revenue rose 77% to Rs 974 crore.
• Operating profit rose by 228% to Rs 285 crore.
• Operating margin stood at 29% compared with 16% a year ago.

To be sure, the Hyderabad-headquartered drugmaker is a mid-cap company with a market value of around Rs 9,851 crore.

The company said high gross margin and change in product mix aided its operating margin in the first quarter.

The API business—which makes raw materials for drugs—boosted margin, the company said. Going forward, Laurus Labs expects growth in its generic API and contract development and manufacturing divisions.

“With our integrated strategy in place and continued investment in sustainable long-term growth I’m very optimistic on delivering superior performance on all parameters,” Dr Satyanarayana Chava, the company’s founder and chief executive officer, was quoted as saying in a statement.

The company’s generic finished dosage forms business, which grew by nearly three-fold, was aided by higher sales from tender business in low- and middle-income countries, the company said. Improvement in north America sales was led by higher sales and the launch of hydroxychloroquine, a medication for malaria.

Laurus Labs’ synthesis and ingredients, and generic API segments grew by 37% and 40% in the three months through June, respectively. Its anti-viral segment grew 19% on the back of higher volumes and offtake in Efavirenz and Tenofovir Disoproxil Fumarate—medication for human immunodeficiency virus patients—along with launch of the anti-retroviral medication Dolutegravir.