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Laurus Labs reported subdued Q2 due to drag in ARV and Onco APIs

News: Laurus reported revenue growth of 5.7% YoY to Rs.1203.5 crore in Q2, partially offset by APIs (down 7.7% YoY). Revenues were mainly driven by 33.6% YoY jump in CRAMS business to Rs.155 crore and growth in Formulations to Rs. 495 crore ( up 9.5% YoY). ARV revenue de-grew 11% YoY to Rs.337.3 crore and Oncology API de-grew 14.2% YoY to Rs. 73.8 crore while other API grew 9.4% YoY to | 115.9 crore. EBITDA margins declined by 415.6 bps YoY to 28.7% and EBITDA de-grew 7.7% YoY to Rs. 345.1 crore. Net Profit was down 16.7% YoY at Rs.201.9 crore for the quarter.

Views: Results were below I-direct estimates due to channel de-stocking for ARV business. Formulations continue to witness demand for ARVs in LMIC countries and portfolio expansion in developed markets while CRAMS was driven by new clients and additional demand this quarter. Overall outlook remains positive with improving demand and planned capacity expansions. We will get more insights post discussion with management.