Laurus Labs share price falls 3% after weak Q1 results; Should you buy, sell or hold?
Laurus Labs share price fell 3% in the trade on Friday after the company reported weak Q1 results impacted by lower sales, operational deleverage and elevated expenses. Laurus Labs shares fell as much as 2.99% to ₹333.50 apiece on the BSE. Laurus Labs Q1 net profit on a consolidated basis fell 88.8% to ₹28.40 crore from ₹252.5 crore in the year-ago period.
The company’s revenue in the first quarter of FY24 declined 23.2% to ₹1,181.8 crore from ₹1,539 crore, YoY. Earnings before interest, taxes, depreciation and amortization (EBITDA) in Q1FY24 decreased 63.2% to ₹166.8 crore from ₹454 crore in the year-ago period. EBITDA margin contracted by 154 basis points (bps) to 14.1% from 29.5%, YoY.
“Performance mainly affected by operational deleverage, material drop in the CDMO business, price fall in ARV portfolio over last year," said V V Ravi Kumar, Executive Director & Chief Financial Officer, Laurus Labs. CDMO is short for contract development and manufacturing organization. Also Read: BPCL share price declines after Q1 results; what should investors do- buy or wait? The company anticipates rebound from H2, with recovering revenue trend, positives from cost improvement programs and raw material price stabilisation.
“Our future capex projects towards strengthening CDMO and Bio division is advancing as per schedule and Debt leverage position remains comfortable," Kumar added. Global brokerage maintained an ‘Underperform’ rating on Laurus Labs with a target price of ₹250 per share. Jefferies said the company missed estimates for the fourth consecutive quarter with EBITDA margin at a multi-quarter low due to weak revenue growth.
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