Mehabe score: 7 G Factor: 5 Piotski Score: 6 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 6.
Description
Laurus Labs is principally engaged in offering a broad and integrated portfolio of Active Pharmaceuticals Ingredients (API) including intermediates, Generic Finished dosage forms (FDF) and Contract Research services to cater to the needs of the global pharmaceutical industry.
Main Points
Growing number of products
Laurus is among the leading API manufacturers in ARV and oncology segment. Its customers include Mylan, Natco and Aurobindo Pharma #.
The company has grown from one-product company in 2010 to 60+ commercial products in 2020. The company has 116 patents .Site:LAURUSLABSMain Symbol:LAURUSLABS
Stock trades at 618.0, above its 50dma 609.33. It also trades above its 200dma 444.0. The stock remains bullish on techicals
The 52 week high is at 697.80 and the 52week low is at 151.59
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
– has delivered good profit growth of 49.00% CAGR over last 5 years
Weakness
– Stock is trading at 12.80 times its book value
– might be capitalizing the interest cost
-Promoter holding has decreased over last 3 years: -4.77%
Competition
– The industry trades at a mean P/E of 33.7x. Laurus Labs trades at the industry’s max P/E of 33.73x. LAURUSLABS trades at a P/E of 33.7x
– Industry’s mean G-Factor is 5.0 while the mean Piotski score is 6.0. LAURUSLABS has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is -9.0%. The max 1- month return was given by Laurus Labs: a return of -8.96 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 1278.0 cr compared to Rs 974.0 cr for period ended Jun 2020, a rise of 31.2%
Operating Profits reported at Rs 395.0 cr for period ended Jun 2021 vis-vis 278.0 for period ended Jun 2020 .
Operating Margins expanded 236.6 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 4.5 compared to Rs 5.53 for previous quarter ended Mar 2021 and Rs 3.21 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 5118.0 cr for period ended TTM vis-vis sales of Rs 4814.0 cr for the period ended Mar 2021, a growth of 5.9%. The 3 year sales cagr stood at 30.7%.
Operating margins expanded to 33.0% for period ended TTM vis-vis 32.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 1053.0 cr for period ended TTM vis-vis sales of Rs 984.0 cr for the period ended Mar 2021, rising 6.6%.
Company recorded a healthy Net Profit CAGR of 123.8% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 733.0 cr for period ended Mar 2021 vis-vis Rs 347.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 45.0% compared to 25.0% over the last 3 Years. – The stock has given a return of 305% on a 1 Year basis vis-vis a return of 90% over the last 3 Years. – The compounded sales growth on a TTM bassis is 70% vis-vis a compounded sales growth of 33% over the last 3 Years. – The compounded profit growth on a TTM basis is 285% vis-vis a compounded profit growth of 80% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 21.54% vis-vis 20.68% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 47.01% vis-vis 48.31% for Mar 2021
Conclusion
– is expected to give good quarter
– has delivered good profit growth of 49.00% CAGR over last 5 years – Stock is trading at 12.80 times its book value
– might be capitalizing the interest cost
-Promoter holding has decreased over last 3 years: -4.77%
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 609.33 and is trading at 618.0, thus bullish price action wise.
