A similar case played out in Neuland labs - pattern seems similar here as well -
Short term past performance pattern for Laurus stock price and biz is - FY 21 Q2 to Q4 mega rise on back of exceptional performance both YoY and QoQ 》 extrapolation leads to froth building by Q1 results 》2 Qtrs underperformance in Q1 and Q 2》Thrashing by mkt with 30% from top and possibly more 》 what happens next?
Given high base of remaining quarters in FY 21, YoY beat is far fetched - IMO A QoQ improvement is first sign of stabilization, before there is YoY beat which will most likely come in Q1 23 supported by low base and expectations.( currently happening in Neuland)
Can Q3 be a beat to Q2 revenue with margins holding/improving a bit? IMO this will drive stock price performance in short term. If one is a long term investor, it doesn’t matter much as Q1 23 onwards market will see what it likes to see, given base will normalize and multiple capacity triggers.
Answer lies in API part of biz for near term -
Going by stocking theory and inventory sitting in market - destocking at some point will normalize - overstoking logically has reflected in Q2 to Q4 21 numbers for laurus( high ARV pie growth against single digit normal) - Good part is that FY21 Q1 and Q2 have elapsed as well as part Q3, logically patients would also run out of 3 or 6 months quota Given in Corona times and bringing back normalcy in demand.
Q3 could be better than Q2 and Q4 better than Q3( even if ARV stays flat , rest of API are doing well QoQ)
FDF and CDMO has also seen QoQ drop - FDF supported by new capacities is likely going to be better with each quarter, CDMO is lumpy QoQ but have done very well at HoH hence for next 2 qtrs could be flattish but good on YoY.
Above is speculation at best, can be completely wrong.
One additional sign on lighter note is that activity in this thread will slow down significantly as well as social media discussion - can take a month or two, At this point there are more reasons to be Pessimistic on near term performance but that is precisely what long term investor and believers need.
Invested and optimist for med term.