Laurus Labs Q4 Results: Stock falls after earnings miss; Management sees better margin in FY25

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Laurus Labs Ltd. fell as much as 3% on Thursday after missing earnings estimates for the March quarter on most fronts.

Net profit for the quarter stood fell 26% year-on-year to ₹76 crore, compared to ₹103 crore last year. The number is also lower than the CNBC-TV18 poll projection of ₹107.8 crore.

Revenue for the quarter increased by 4.3% from last year to ₹1,440 crore, which was in-line with expectations of ₹1,426 crore.

Earnings Before Interest, Tax, Depreciation and Amortisation stood at ₹242 crore for the quarter, also lower than estimates of ₹296 crore.

Although the company’s EBITDA margin recovered on a sequential basis to 16.8%, it missed expectations of 20.7% from a CNBC-TV18 poll. The company ended financial year 2024 with an EBITDA margin of 16%. The management in its investor presentation said that the margin will improve from these levels in financial year 2025 supported by better asset utilisation and productivity gains while continuing new initiatives.

For the current financial year, the management expects growth to be driven by a ramp-up in growth projects and with new assets coming online. Offsetting pricing headwinds in some parts of the API portfolio will also aid growth.

Laurus Labs’ API business, which contributed to more than half of the company’s topline delivered a strong 30% growth across all businesses. The customer product pipeline also benefitted from the global supply chain diversification.

The Formulations or FDF business saw continued volume-led recovery in Anti-Retrovirals (ARV) and stable pricing despite market challenges. New launches in the US and increased share in established portfolio also supported growth.

Gross margin for the quarter fell 10 basis points from last year and 450 basis points sequentially due to the company’s product mix.

Shares of Laurus Labs ended 2.4% lower at ₹424 post the announcement. The stock has risen 41% over the last 12 months.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow