What better way to start a Thursday morning than with key takeaways from #Laurus Q4 results.
1. Aiming to do 1B$ in revenue in FY23 maintain 30% EBITDA margins.
In b/w lines: In b/w lines: Will diversify API & formulation division and grow the anti-diabetic, oncology API and formulations division.
In b/w lines: In b/w lines: Will diversify API & formulation division and grow the anti-diabetic, oncology API and formulations division.
Laurus also increased capex guidance from 1100 cr in last Q to 1500cr-1700cr over FY22 and FY23. Not all of capex done in FY23 would contribute to 1B$ sales target.
So no additional capex required for 1B$ target. EBITDA Margins to be maintained at 30% can improve beyond FY23 fueled by Laurus Synthesis and Laurus Bio.
2. CRAMS division to be self-reliant by FY23
In b/w lines: 25% of all that capex will be for laurus synthesis. New R&D center being built will further accelerate the growth.
In b/w lines: 25% of all that capex will be for laurus synthesis. New R&D center being built will further accelerate the growth.
Pursuing several active projects in the late-stage clinical programs & commercial supplies of 4 products are ongoing.
Acquired land for manufacturing site which will cater to manufacturing need for next 25 years (big statement to make. All further capex in Laurus synthesis will be brownfield capex. Accretive for Unit economics). Could there be value-unlocking (IPO) here beyond FY23? Maybe.
3. Laurus Bio to start making recombinant proteins and do fermentation.
In b/w lines: Current capacity 10,000L. Building 1,80,000L capacity. Will build 1M L capacity in next 2 years. That’s a 100x scale up in 2 years.
In b/w lines: Current capacity 10,000L. Building 1,80,000L capacity. Will build 1M L capacity in next 2 years. That’s a 100x scale up in 2 years.
In medium term, Laurus bio will do contract development and manufacturing services in biotech space. In long term, they do have plans to manufacture biologics, vaccines, insulin. Division needs large customers. Talks ongoing. Will grow rapidly. Need 5 years to nurture division.
4. A meta-observation from me: Saurabh Mukherjee sir in recent debate with sunil sir made a good point about companies like #pidilite being valued not just for the tangible cashflows, but for the ability of the management to churn out multiple growth engines one after another.
Adhesives, water proofing. Similar reasoning was also applied for Dr lal path labs. I think #lauruslabs and Dr chava have demonstrated the ability to do exactly the same. Laurus synthesis started 7 years ago. Is now scaling up and growing beautifully.
Started laurus bio now to cover the next decade of growth. Aggresively diversifying into non-ARV APIs backed by 4% of sales being spent in R&D. This is a management and company which knows how to create the engines of future profitable growth in the present.
That intangible "asset" is not reflected in current valuations IMHO. That asset remains unseen, even today with the company being well covered by all research houses.
Disclaimer: I am invested from lower levels and of course positively biased. This is not a buy or sell recommendation but only for educating fellow investors.
Please retweet the first tweet if you like the thread so it can benefit maximum investors. 😁
To those wondering why I'm posting this a month after it happened, I was at the peak of my covid experience back then so only listened to the concall yesterday.
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