Laurus Labs Q4 Results: Profit Drops 55%, Misses Estimates
Net profit of the pharma and biotech company slumped 55% year-on-year to Rs 103 crore.
Laurus Labs Ltd.'s fourth-quarter profit fell, missing analyst estimates.
Net profit of the Hyderabad-based pharma and biotech company slumped 55% year-on-year to Rs 103 crore in the quarter ended March, according to its exchange filing. That compares with the Rs 211 crore consensus estimate of analysts tracked by Bloomberg.
Sequentially, the profit fell 49%.
Laurus Labs Q4 Highlights (YoY)
Revenue declined 3% to Rs 1,381 crore as against the Rs 1,517-crore forecast.
Operating profit was down 28% at Rs 286 crore, as compared with an estimate of Rs 373 crore.
Operating margin stood at 20.7%, down from 27.8% a year ago and as compared with an estimate of 24.6%.
"Our Q4 results was challenging, driven by steep fall in CDMO revenues and higher upfront cost of capex projects and R&D projects," Chief Financial Officer VV Ravi Kumar said in the filing
The executive director said they delivered good financial performance for fiscal 2023 in line with their revised outlook. Business mix had positively contributed to margins, but the negative operating leverage on new capacities commissioned, higher inflation and forex impact led to the overall margin fall as compared with last year.
"We are working on several initiatives around efficiency improvement, which should partly mitigate its impact in FY24," Kumar said. "Our future capex projects towards strengthening CDMO and non-ARV generics are advancing as per schedule and debt leverage position remains comfortable."
Chief Executive Oat Satyanarayana Chava said their research and development-driven commercial strategy continued to make advancements at speed. They are making efficient use of strongly linked technology platforms and manufacturing excellence to seize new business opportunities, and widening the target market.
The founder said the firm's investment programmes are well on track with a focus on long-term success.
Other Q4 Highlights (YoY)
Generic formulations business generated a revenue of Rs 393 crore, a decline of 20%. But it continued to show strong rebound from the lows of the second quarter, according to the exchange filing.
Active pharmaceutical ingredients reported a revenue of Rs 714 crore, up 32%. Other APIs reported strong growth, following a ramp-up in the new contract supplies and anti-retrovirals business continuing steady momentum and witnessed volume-led improvement.
Custom synthesis business reported 37% decline in revenue at Rs 228 crore due to completion of purchase order-related material supplies in December 2022. It is actively working on over 60 projects and ongoing supplies for four commercial APIs and several intermediates.
Laurus Bio segment delivered a solid recovery as it clocked fourth-quarter sales of Rs 46 crore, up 31% year-on-year. This was driven by unprecedented growth in the CDMO.
Laurus Labs was selected by The Global Fund as a panel supplier to produce ARV drugs for 2023–25 period.
Capacity expansion plans
Formulation capabilities expansion at Unit 2 by 400 crore units annually. Gradual commercial production ramp-up expected.
Expansion in CDMO capability on track to include new opportunities and new platform technologies.
New site R3 for Bio division in design finalization phase. Expansion in phased manner.
The board announced an interim dividend of Rs 1.20 per share.
Shares of Laurus Labs fell 3.82% after the results were announced, in comparison with a 0.61% rise in the benchmark Sensex at 3.15 p.m.
