LAURUS LABS LTD
Incorporated in the year 2005, Laurus Labs Ltd is a pharmaceutical company located in Hyderabad. They develop and manufacture APIs (Active Pharma Ingredients), Finished Dosage Forms and are into contract manufacturing. They also produce specialty ingredients for Nutraceutical, Dietary Supplements, and Cosmeceuticals. Their focus areas include drug for complex and critical diseases. They have received several approvals from various renowned drug regulatory authorities across the world and operate through its subsidiaries in Europe and United States. They have six WHO compliant manufacturing facilities and one dedicated R&D laboratory in Andhra Pradesh. In March 2020, Laurus Labs received US Food and Drug Administration approval to market hydroxychloroquine tablets and has announced to supply the same for medical trials of preventive treatment of COVID-19.They are active in CSR initiatives, like promoting science & health literacy, educational and medical donations and activities towards women empowerment.
INDIAN PHARMACEUTICAL INDUSTRY
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With a large pool of research scientists, India is the largest provider of generic drugs and various vaccines globally. The cost of manufacturing formulations in India remains quite lower than other countries, driven by cheap labour, though low productivity levels, are an area of concern.
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India is having a huge potential for conducting research and development activities due to the presence of 300+ medical colleges, and over 20,000 hospitals.
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Indian pharmaceutical sector is expected to grow to US$ 100 billion (approx), by 2025. Pharmaceutical exports from India stood at US$ 20.70 billion (approx) in FY20. India’s domestic pharmaceutical market turnover reached US$ 20.03 billion (approx) in 2019.
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The sector attracted cumulative FDI inflow worth US$ 16.50 billion (approx) between April 2000 and March 2020 according to the data released by Department for Promotion of Industry and Internal Trade.
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As per Economic Survey 2019–20, Government expenditure (as a percentage of GDP) was 1.6% during FY20 on health. Under Budget 2020–21, Rs 65,012 crore (approx) has been allocated to the Ministry of Health and Family Welfare.
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Reasonably priced medicines under Pradhan Mantri Bhartiya Janaushdhi Kendra's (PMBJKs) achieved an impressive sale of Rs 100.40 crore (approx) in the first two months of FY21.
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‘Pharma Vision 2020’ launched by the Government’s Department of Pharmaceuticals, aims to make India a major hub for end-to-end drug discovery.
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Necessity at present is the speedy development and introduction of critical drugs and vaccines to grip any form of biological catastrophe.
VALUATION
INDUSTRY |
AMOUNT IN RS. |
SECTOR |
PHARMACEUTICALS |
FACE VALUE |
2 |
MKT.CAP (CRORE) |
15,150 |
CLOSING PRICE AS ON (20/11/20) |
283 |
P/E RATIO |
26 |
BOOK VALUE |
34 |
PRICE / BOOK VALUE |
8.34 |
52 WEEK H / L |
345 / 62 |
5 YRS H / L |
346 / 60 |
EPS (TRAILING TWELVE MONTHS) |
11 |
DIVIDEND YIELD % |
0.18% |
BSE CODE |
540222 |
NSE CODE |
LAURUSLABS |
INCOME STATEMENT
BALANCE SHEET PARTICULARS (RS.CR) |
FY MAR 20 |
FY MAR 19 |
FY MAR 18 |
FY MAR 17 |
FY MAR 16 |
EQUITY |
106.91 |
106.44 |
106.03 |
105.76 |
15.77 |
TOTAL RESERVE & SURPLUS |
1,708.89 |
1,484.46 |
1,407.27 |
1,249.82 |
785.02 |
TOTAL CURRENT LIABILITIES |
1,636.72 |
1,379.44 |
1,268.02 |
1,117.34 |
884.62 |
TOTAL ASSETS |
3,739.36 |
3,318.33 |
3,007.77 |
2,672.55 |
2,308.35 |
9 MONTHS RESULTS |
FY DEC 19 |
FY DEC 18 |
FY DEC 17 |
FY DEC 16 |
FY DEC 15 |
INTEREST |
67.42 |
68.87 |
52.75 |
82.14 |
87.30 |
NET SALES |
1,968.11 |
1,618.51 |
1,480.30 |
1,420.04 |
1,300.62 |
BASIC EPS |
14.49 |
4.81 |
11.98 |
14.74 |
14.62 |
NET PROFIT |
154.52 |
51.05 |
126.79 |
128.25 |
91.24 |
SHARE HOLDING PATTERN
SHAREHOLDING PATTERN (AS ON JUNE 2020 ) |
% HELD |
PROMOTERS |
32 |
PLEDGED |
32 |
FII/FPI |
16 |
TOTAL DII |
32 |
FIs AND INSURANCE CO. |
0.17 |
MUTUAL FUND |
4.15 |
COMPANY PRESPECTIVE & REVIEW
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Laurus Labs has declared an equity dividend of 25.00% amounting to Rs 2.5 per share for the year ending March 2020. It has consistently declared dividends for the last 5 years.
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Profit and loss metrics shows growth in net sales at a 5 year CAGR of 12 % while balance sheet metrics shows an increase in net worth at a 5 year CAGR of 20%.Proper risk management and internal controls are well in place.
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Laurus Labs does have substantial institutional investors who are holding a good portion of the company's stock, indicating a good credibility among the investment community.
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They have a superior execution facility in the anti-retroviral (ARV) segment and Contract Development & Manufacturing Organization (CDMO) business, together with addition of new molecules in the API segment.It has also set up modern Current Good Manufacturing Practices (CGMP) facilities to manufacture New Chemical Entities and intermediates.
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COVID-19 protocols and strategies are strongly placed at Laurus Labs for business continuity without any disruptions in these challenging times.
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Given the strong Q2FY21 earnings, strong order book, recovering margin, healthy return ratios and free cash flow generation, the company is continuously evolving as a strong performer and can be considered as a good buy.
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