Thread by @sagarbandodkar2

Laurus Labs Ltd. – A leading research-driven pharmaceutical company. 1/

Laurus Labs was established in 2006 with an initial seed capital of Rs.60 crores by a chemist and repeat entrepreneur, Dr. Satyanarayana Chava, who has three decades of experience in the pharmaceutical industry. 2/

Dr. Chava worked as the Chief Operating Officer for Matrix Laboratories Limited prior to founding Laurus Labs. By 2008, Laurus had begun its decade-long journey in APIs. These are the chemicals or the key ingredients used in drugs. 3/

Treatment for retroviruses such as HIV was an emerging area, and the company focused on this niche with efavirenz as its main product. 4/

Financial & Operational Highlights of Laurus Labs.
5/

Future Outlook
The steady growth in oncology API, being a high margin-low volume segment, is expected to drive margins, supported by one of the largest high-potent API capabilities in India. 6/

Growth in API has resumed with launch of first-line products – 3TC (Lamivudine) and DTG (Dolutegravir) and supply of APIs to EU and North America and will be driven by introduction of second line APIs such as Lopinavir and Ritonavir launched in FY21. 7/

The management expects revenue to double from the recently acquired Richcore Lifesciences (renamed as Laurus Bio) operations in FY22. It is in the process of acquiring land for further expansion by creating close to million litres fermentation capacity. 8/

Laurus Bio will be the next secular leg of growth for the next 10-15 years and the impact of this acquisition will be shown after 2-3 years in the financials significantly. 9/

“We are very excited about this acquisition, as this gives us entry into the high-barrier biotechnology segment. Laurus Labs will bring scale to Richcore’s operations and can become a major player in the biotech space,” says Dr. Satyanarayana Chava, founder and CEO, laurus. 10/

LAURUS initiated validation of several APIs in the non-Oncology and non-ARV API segment. It is adding manufacturing capacity to drive growth beyond FY23.
the oncology API is a sticky business and will ensure stable cashflowsin future. 11/

Return ratios of Laurus Labs.
The return ratios showcase the power of operating leverage beautifully. The ROCE was between 14%-16% for 3-4 years and it even dipped in 2019 but the ROCE shot up ro 40% in 2020 this is the power of operating leverage . 12/

The EBITDA margin has shot up to 33% which is mindboggling🤯and the management has guided to maintain it above 30%.
"If you give me a lever long enough and a place to stand, I can move the world." ~Archimedes
13/

Shareholding pattern of Laurus Labs.
FII's have constant raised stake in the company they have more than doubled it from 2018 to 2021.
Promoters have reduced the stake considerably but there was a share pledge and the promoter revoked the pledge by selling a small 3% stake. 14/

Bottomline-
Laurus is well positioned to follow in the footsteps of some of the industry’s most successful CDMOs, thanks to its excellent chemistry and integrated strategy. 15/

The company would gain from
a) debottlenecking in FDF,
b)capacity expansion in the non-ARV segment,
c) improved prospects in the Synthesis segment, and
d) scale-up in the Enzymes/Biologics section in the future. Its exceptional ARV execution, strong chemical skill set. 16/

The inclusion of new compounds in the Other API segment, cost efficiency supporting profitability, and addition of new levers in CDMO with Laurus Bio will all help the company grow.
Thank you for reading do RT. 17/17

@threadreaderapp unroll