Laurus Labs Ltd Research ReportQ3FY21

Vertically integrated story panning out… Q3 revenues grew ~76.6% to | 1288 crore amid strong growth across segments driven by 103.5% YoY jump in API segment to | 731 crore amid strong traction in antiviral APIs to | 568 crore (2.65x YoY) driven by higher volume of first-line products. Formulations revenue grew 47.2% YoY to | 430 crore on the back of higher tender business from LMIC and higher volumes from US, Europe. CRAMS business grew 62.4% YoY to | 127 crore. EBITDA margins improved 1278 bps to 33.1% due to better product mix and improved operating leverage. Subsequently, EBITDA grew 187.7% YoY to | 426 crore. PAT was up 271.3% YoY at | 273 crore. Formulations to be main growth engine Leveraging on strong backward integration, Laurus has demonstrated commendable execution capability in this segment growing 165x from | 5 crore to | 825 crore in FY18-20 with majority growth stemming from tender driven opportunities via participation in Global fund, PEPFAR and various incountry African tenders. In order to supplement future growth, capex plans are already under way to increase capacity by 1.8x by H2FY22E. Laurus is also developing a robust generic pipeline for the developed markets.