Buy Laurus Labs, target price Rs 615: Motilal Oswal

Motilal Oswal has retained buy rating on Laurus Labs and revised target price higher to Rs 615 from Rs 520. The stock ended down 0.5 per cent at Rs 512.35 on Thursday while the BSE Sensex closed 997.46 points up (+3.05 per cent) at 33,717.62.

Laurus Labs Ltd., incorporated in 2005, has a market cap of Rs 5477.76 crore.

Investment Rationale


Laurus Labs ended FY20 on a robust note with highest ever annual profit after tax, said Motilal Oswal. The brokerage expects a 23 per cent earnings CAGR, led by a 22 per cent sales CAGR in the FDF/other API segment and a 31 per cent sales CAGR in the Synthesis segment over FY20–22.

Financials

For the quarter ended March 31, 2020, the company reported consolidated sales of Rs 839.14 crore, up 15.02 per cent from last quarter sales of Rs 729.59 crore and up 32.11 per cent from last year same quarter sales of Rs 635.16 crore The company reported net profit after tax of Rs 110.15 crore in the latest quarter.

Promoter/FII Holdings

Promoters held 32.04 per cent stake in the company as of March 31, 2020, while FIIs held 11.29 per cent, DIIs 31.58 per cent and retail investors 25.09 per cent.