Laurus Labs Ltd (NS:), a pharmaceutical company has been on the losing run for three sessions in a row. Its shares fell by 5.56% on Tuesday’s early trades and were quoting at ₹ 453 levels. Its shares were at ₹ 525 levels on October 21, 2022, and the current share price indicates a fall of 13.71% in the past three sessions.
The company’s share price took a downturn after it missed the expected September quarter (Q2FY23) earnings led by high industry-wide channel inventory, slower demand and pricing pressure in antiretroviral (ARV) formulations and active pharmaceutical ingredients (APIs), according to analysts.
Motilal Oswal (NS:) has cut its EPS estimates by 8 per cent for FY23 and 9 per cent for FY24 to factor in a steep price erosion in ARV products, lesser tender wins in ARV formulation and increased overall operational cost. The brokerage values the stock at 23 times 12-month forward earnings and has maintained a buy rating with a target price of ₹ 610. This translates to an upside of 34.65% as compared to its current share price.
ICICI Direct has a ‘Buy’ call on the shares with a target price of ₹ 630. This translates to an upside of 39.07% as compared to the current share price. The brokerage continues to remain positive on the stock amid growing demand for NCE drug substances and products with ongoing supplies for seven commercial products and a visible order book.
In the latest quarter, Laurus Labs’ consolidated net profit increased by ₹ 14% to ₹ 233 crores as compared to ₹ 204 crores in September 2021. Its revenue from operations increased to ₹ 1576 crores from ₹ 1203 crores in September 2021.
Written by Simran Bafna
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