Add Laurus Labs Ltd for the Target Rs. 1,255 by Choice Institutional Equities
Key Conference Call Highlights
CDMO:
* Growth driven by late-stage pipeline programs and commercial New Chemical Entity API supplies.
* Robust and diversified pipeline across stages, with no material concentration risk and strong multi-year visibility from partners.
* Three APIs commercialised in last 18 months, all with long patent lives and clear partner forecasts.
Laurus Bio
* Vizag fermentation greenfield (400 KL) on track to be operational by end of 2026.
* Initial batches will be non-pharmaceutical (industrial chemicals, surfactants, polymers).
* Long-term plan to scale to 1 million litres at Vizag once initial commercialisation is achieved.
API & Formulations:
* Continued leadership in ARV, catering to ~1/3rd of global HIV population with stable funding environment.
* Ongoing capacity expansion and backward integration, enhancing supply reliability and cost-efficiency.
* Strong growth led by new launches and traction in developed markets (US/EU).
Outlook:
* ~60% gross margin guided as sustainable; EBITDA margin expected to remain in high-20s supported by mix and operating leverage.
* Order book visibility remains strong for FY27, supporting continued growth.
* Target to reach ~50% CDMO contribution by FY30, driving structural margin expansion
* ARV revenues to remain stable in absolute terms.
* Next-gen platforms (biocatalysis, precision fermentation, gene therapy, ADC, cell therapy) provide medium/long-term optionality.
* CapEx guidance upgraded to INR 3,000 Cr in the next two years, focussed on growth.
* Middle East crisis: No near-term supply disruption anticipated, though input cost volatility may persist.
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SEBI Registration no.: INZ 000160131
