Pharma Giant's Strategic Move: Rs 83.3 Crore Investment in Joint Venture!
With a PE ratio of 157x, the company trades at a premium compared to the industry PE of 28x. The company has ROCE of 6.60 per cent and ROE of 3.97 per cent.
Laurus Labs Limited has made a significant equity investment in KRKA Pharma Private Limited, a joint venture of the company. The investment amounts to Rs 83.3 crore, with Laurus Labs acquiring 83.3 million equity shares at a face value of Rs 10 each. This development follows an earlier announcement on March 6, 2025, and is part of a rights issue. The move is seen as a strategic expansion for Laurus Labs, enhancing its presence and capabilities within the pharmaceutical sector. The investment reflects Laurus Labs' commitment to strengthening its joint venture operations and potentially expanding its market influence. The company has communicated this update to the relevant stock exchanges, ensuring transparency and compliance with SEBI regulations.
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Laurus Labs, established in 2005, is a prominent pharmaceutical and biotechnology entity known for its leadership in Active Pharmaceutical Ingredients (APIs) across various therapeutic areas including anti-retroviral and oncology drugs. The company provides comprehensive CMO and CDMO services, catering to global innovators from clinical drug development to commercial manufacturing. With a workforce of over 6,500, including more than 1,050 scientists, Laurus Labs operates multiple globally approved facilities. The company's stock is currently priced at Rs 573.45, with a market capitalization of Rs 30,923.43 crore. Despite a slight decline in its three-year return, Laurus Labs has achieved a 43.42 per cent return over the past year, showcasing its resilience and growth potential in the competitive pharmaceutical landscape. The company has been maintaining a healthy dividend payout of 17.8 per cent.
In the Quarterly Results of Dec-24, revenue stood at Rs 1,415.05 crore, reflecting a growth of 18.42 per cent YoY and 15.64 per cent QoQ. Net profit increased significantly to Rs 92.30 crore, marking a growth of 298.88 per cent YoY and 365.22 per cent QoQ. The net profit margin for the quarter was 6.52 per cent, compared to 1.94 per cent in Dec-23 and 1.62 per cent in Sep-24.
For the full-year results, revenue for FY24 was Rs 5,040.83 crore, declining by 16.55 per cent compared to Rs 6,040.55 crore in FY23. Net profit for the year stood at Rs 200.26 crore, reflecting a decrease of 81.82 per cent from Rs 143.80 crore in FY23. The net profit margin for FY24 was 2.85 per cent, compared to 13.09 per cent in FY23.
As of December 2024, the shareholding pattern of the company is as follows: Promoters hold 27.62 per cent, FIIs hold 25.56 per cent, DIIs hold 12.74 per cent, and the public holds 34.09 per cent. There is a notable increase in promoter shareholding compared to the previous quarter, rising from 27.18 per cent to 27.62 per cent. FIIs have slightly decreased their holding from 26.08 per cent to 25.56 per cent, while DIIs have also reduced their stake from 13.05 per cent to 12.74 per cent. Public shareholding has increased marginally from 33.69 per cent to 34.09 per cent.
With a PE ratio of 157x, the company trades at a premium compared to the industry PE of 28x. The company has ROCE of 6.60 per cent and ROE of 3.97 per cent.
Investors must keep this Mid-Cap stock on their radar.
Disclaimer: The article is for informational purposes only and not investment advice.