Laurus Labs wakes up with a bang after being asleep for three months!

In Q3FY22 Laurus Labs top line fell 20 per cent and net profit had a steep fall of 44 per cent YoY, surprisingly the market reaction was extremely positive.

A leading generic API company Laurus Labs has announced its Q3 results yesterday. Shares of the company were in sideways for three months since November. But from yesterday's afternoon (January 27) trading session, it is up more than 13 per cent with the results being published just before the market close.

Today, Nifty was trading flat, whereas Laurus Labs rallied more than 7 per cent.  

Q3 earnings report:   

On a consolidated basis, Laurus Labs revenue declined 20 per cent to Rs 1,029 crore on a YoY and 14 per cent down QoQ. Their major revenue contributors are as follows. 

1. APIs (contributes 41 per cent of total revenue) sales declined 42 per cent due to lower demand in the ARV segment and continued de-stocking impact in ARV business. Other APIs/Oncology continued to see good recovery QoQ (+19 per cent, +16 per cent). ARV APIs specific impact should ease from Q4 onwards. 

2. Formulation (FDF) (contributes 36 per cent of total revenue) declined 13 per cent YoY impacted by lower demand in ARV segment due to stocking at channel partners, there are some signs of demand stabilization visible from Q4 FY 22. 

3. Synthesis (contributes 20 per cent of total revenue)  had a solid growth momentum maintained grew 63 per cent YoY. Expansion in CDMO capability on track to include new opportunities; continued confidence in the strong outlook for FY 2022 and beyond. 

EBITDA declined 33 per cent to Rs 290 crore on YoY and 17 per cent down on QoQ and the corresponding margin is 28 per cent, contracted 540 bps on YoY. The margin narrowed due to an increase in employee-benefit expenses and other expenses. 

Net Profit declined 44 per cent to Rs 154 crore on YoY and 24 per cent down on QoQ. The net profit margin is 15 per cent which got contracted 620 bps on YoY.  

At the closing bell, Laurus Labs was trading at Rs 497.8, up by 7.12 per cent for the day.