Laurus Labs - Can Business Transform to Next Level?

but the promoter itself is selling its stake?

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Minimal. FIIs have been increasing stake since Dec 2022.

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Laurus signs pact to set up a joint venture with Slovenia’s Krka pharmaceutical.

A detailed discussion on Laurus and the overall Pharma & CDMO sector.

https://x.com/unseenvalue/status/1751024868202528774?s=20

And here is the YouTube link to the same.

Hope you find it useful.

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Indigenous CAR-T cell therapy now available for commercial use: ‘first’ patient declared free of cancer

https://indianexpress.com/article/cities/mumbai/indigenous-car-t-cell-therapy-now-available-for-commercial-use-9147148/

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Does anyone have visibility into potential revenue impact of this for Lauras Labs and respective timeframes?

I am not sure about the revenue impact. Still, I appreciate that management has a vision for allocating and strategizing capital for life-changing, disruptive investments. It may not mean much in the short term, but it opens huge levers for players like Laurus in the long term, not just for economic and social aspects but also for creating a name for themselves in the space.

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Three patients are fully recovered from cancer as per the below report using CAR-T therapy in India developed by ImmunoAct where Laurus Labs has 33.86% stake.

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image

Laurus Labs - Can be a great opportunity if the management is able to walk the talk wef Q4

Q3 FY 24 concall and results highlights -

Sales - 1195 vs 1545 cr ( down 23 pc )
EBITDA - 183 vs 404 cr ( down 55 pc, margins @ 15 vs 26 pc - steep decline. However, the gross margins were at 54 pc, up 1 pc YoY )
Net Profit - 23 vs 203 cr ( down 89 pc )

Segment wise revenues ( for 9M ending Dec 23 ) -

Formulations - 984 vs 747 cr, up 32 pc
Improved business in ARVs and arresting of price declines. Developed Mkt export formulations also picked up. Multiple product launches scheduled in US in next Qtr

APIs - 1800 vs 1895 cr, down 5 pc
Sales breakup of APIs -
ARVs - 61 pc, Onco APIs - 15 pc, Other APIs - 24 pc
New capacity addition in progress in the Onco APIs segment

CDMO - 686 vs 1939 cr, down 65 pc ( steep decline due large PO executed LY. Except for that, core business grew 30 pc )

Company has 50 plus projects in Phase - 1,2,3 + 10 molecules in commercial stages. Seeing good demand/enquiries for late stage NCE molecules

Animal Health contract has commenced commercial validation batches

800 cr capex in CDMO facilities is on track

Bio - 131 vs 80 cr, up 65 pc

Total - 3600 vs 4660 cr, down 23 pc

Management commentary -

Believe that capacity utilisations should improve wef Q4 and hence the company should be able to report significant margin recovery. The same was expected in Q3 but has been pushed back into Q4. Expect capacity utilisation to pick up in Q4 and EBITDA margins to cross 20 pc. The confidence for the same is coming from the order book lined up wef Q4. The same is expected to sustain in FY 25 as well

As the capacity utilisation improves, EBITDA margins should get a good bump up. Continued interest and CDMO enquiries is a very positive sign

The Animal health contract is a > 10 yr multi product contract for supply of 20+ APIs to Intervet GmbH, a subsidiary of Merk Animal Health Ltd

Company also has a > 10 yr agro-chem products CDMO contract at hand. Capex for the same is on. Commercial supplies may begin in H2 FY 25

Disc: hold a tracking position, will add more as and when better results start fructifying, biased, not SEBI registered

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the story would take another 6 months… management is always more positive… so be prepared for some short term pain…

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An investor need to be always watchful about positive commentary of Management of any Pharma business.
LUPIN have also gone through this phase of negative growth and Management used to always paint positive picture but execution was poor.
Investing in Indian pharma business is not easy after 2012-13-14 onwards.

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Sharing a GROUND report by Botlivala & Karani Securities Pvt. Ltd on their Hyderbad Pharma plants visit. It covers Laurus Labs also.

Pharmaceutical - Hyderabad Visit - Flash Note - 01 Apr 24.pdf (347.4 KB)

I hope you find it useful

dr.vikas

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Just sharing an article about the CDMO landscape in India

Hope you find it useful

dr.vikas

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Please share the source of the above information
Thanks in advance

AFAIK that excerpts is from a research report recently shared in media.