Due to a reclassification of a family from promoter to public, promoter share holding came down by 3.35% (came down by more than 10% of previous 32.13%) to 28.78%.
Does any one know why this promoter became public ? Was there any questions on this point in today’s concall?
Laurus management clarified this during the earnings call today.
Above mentioned persons used to work at Laurus earlier but left the firm 3 years ago. They requested the regulatory body for reclassification which got approval.
Regulators have set reclassification guidelines for existing promoter and shareholder to reclassify them into the public category and above changes have followed the process.
If a person is not active & not interested in running the business, he can follow the process to get himself / herself reclassified. If we see in this case outgoing promoters were selling their holding & that shows their lack of interest in business.
It seems to be DIIs are decreasing their stake and FIIs are increasing…can someone educate me on this? Do they see any risk?
Report by ICICI Direct on Laurus Labs
Regards,
Krishna
I listened to the Laurus concall today.
Management came out with all guns blazing without making it too obvious. Most of the answers indicated strong growth continuing in the next two quarters with similar margins and with more and more capacities coming on stream in next few quarters, FY 22 and FY 23 also are likely to be strong.
The main growth engines are likely to be higher formulation revenues and CDMO. Margin levers will be in form of higher revenues from custom synthesis and higher revenues from formulations.
Key monitorable for me is how they fare in the US generics space where they seem to have started filing and getting ANDA approvals.
Key risk according to me remains the heavy capex and its associated risks besides keyman risk.
Overall results have been well above expectations and concall provides higher conviction about growth continuing going ahead.
Company currently seems to be in the high growth phase where if investors play it right they get the twin benefits of growth and re rating. Growth looks like a given in Laurus, and one needs to be see how much further re rating it commands. Since past 2-3 quarters it has outperformed the whole comparable peer set in terms of topline and bottomline growth.
Technically the stock seems to be consolidating between range of 300-345.
disc: invested.
Dr Chhava interview. We have to give it to the interviewer, anchor Anil Singhvi who asks very penetrating questions. 
The last one about bogus company was very satirical.
No sir. It was because of couple of tweets
surprising coming from someone who has large following. Also each one is entitled to his/her view and raise red flag if any. But here its only name calling, without any data to back
@hitesh2710 bhai. Two questions?
(1) Do you find any red flags with regard to the cash flows? I find that all through that the company has operating cash flows of 80% of the PAT. However, we cant expect FCF from these companies as they are re-investing. In any case presently the ROCE is 37% (mgt claims, but my rough calculation comes to 32%, which is fine either ways).
See this tweet - Am I missing what the learned are seeing
(2) Ambit capital which was showing 11.68% for June 2020 quarter is not showing in September 2020. Offloading such huge stake is a big concern.
Also to add. Is the offloaded stake with the public now?. Any ways to find this out
Disc: Invested
@ram1984 When a company’s stock does really well it’s but human nature to panic and to start looking for signs that things are not going well. I dunno who sandip Sabharwal is but the fact he doesn’t understand why cash flow is low due to reinvestment in this industry and how the price is going up due to actual earnings and not future earnings(like Adani green) means it can’t be put under asm list is just giving the public wrong information and makes him come off as a bitter man who didn’t see this coming. This is what price discovery is in the stock market… if movement is relative to Earnings then there’s no need for circuit changes/asm list etc.
Regards ambit, I’m sure there were a lot of institutions who cashed in after the run up post last quarter just to be 100 percent sure that it wasn’t a one off . With the amounts of money they put in doubling/tripling it is more than an enough return for them. This is where we have an edge over them. Now that Q2 was such a resounding success expect them and others to come back in since visibility is now present for a few years to come.
Also, Everything looks clean and by the books in the balance sheet and management commentary and guidance has been nail on head so far.
Note:
I’d request the community to flag and delete my post if needed. While It’s good to look at the negatives… Random Twitter accounts/institutes leaving aren’t the best source for the same. Cheers
Disc: invested
Hitesh ji do you see any chances of Laurus doing a QIP for their capex and reducing the debt? Will that mitigate some of your stated risks with associated capex? How good idea is it to do a QIP.
Though the question is directed towards mr hitesh. I want to mention that this question was asked in the concall. I believe mr chava mentioned it will be through internal acruals. They will post the concal transcript in somedays (like prev quarters). We can confirm with that too.
We have an audio transcript from Trendlyne.
Great . At 45:21 he is asked how they are funding the capex. Dr. Chava says internal and also goes on to say that is why they are not reducing the debt Because they are funding working capital or creating more infrastructure.
I’m from the state of telangana, the place from where laurus labs is. After sandip sabharwal twit I began searching their credentials to found out whether its laurus or bogus.
The better way to search about anyone is their social media profile. So I went through the profile of laurus labs in facebook. Their page was opened in 2012 and some of the posts and interviews are in telugu language, I read them all.
What I understand from their social media pages is, most of the employees of the company admire dr. Chava, they love him. An employer will command the love of their staff only when he is very good to them and for the visionary he is. Every product launch and every EIR or sudden FDA audit report is celebrated by all the employees of the company since 2012. They are actively engaged in the growth of the company.
We can’t clear our digital foot print how much we try. From the details I found out that the success the laurus labs enjoying is due to the years of hard work they put in, due to the leadership of dr chava and the contribution of all the laurets( they laurus labs team calls themselves like that). So I can conclude that this is not one of year of black buster result , their products are genuine and most importantly they are not bogus labs but LAURUS LABS.
This is purely my opinion, other board members can add their comments.
As you have spent enough effort and able to find many positive notes from their social media footprints. Although its always good to know positive news about management and company where you have a holding, but any analysis shouldn’t be considered complete or conclusive till we gather inputs from other side as well. Did you put enough effort to look bad views / comments / inputs and you couldn’t find any? OR you found few negatives and chose to ignore? Can you share them as well for the benefit of community members.
I know that you have mentioned FB as source and everyone has access to that but as you are from same place & already spent effort to help community, I would like to have your views for everyone’s benefit.
I am from same location where laurus lab is located. I can go to their office and survey their employees what they feel about the company. Please suggest me what questions we can ask employees so that we get some idea about laurus.