Laurus Labs Q1 Results: Strong margin beat with third straight quarter of over 20% margins

Shares of Laurus Labs Ltd. recovered from the lows of the day after delivering a beat in comparison to the street expectations as well as from the same quarter last year. This is also the third straight quarter that margins have been in excess of 20%.

A CNBC-TV18 poll is expecting Laurus Labs to report a revenue growth of 27% from last year to ₹1,514.2 crore, while its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter is likely to be at ₹324 crore, which will be a jump of 89% from the year-ago quarter.

EBITDA margin is likely to expand by seven percentage points from last year to 21.4% from 14.3% earlier an this could be the third straight quarter when Laurus Labs reports margins above 20%.

The street anticipates a strong quarter on account of a low base and continued momentum from the March quarter, which was better than expectations.

Formulations segment for Laurus is likely to grow by over 40% from the same quarter last year. This growth is likely to be led by the Non-Anti-Retro-Viral (ARV) business, which is estimated to grow at 25%.

During the March quarter, the formulations business had grown by 26.5% from last year to ₹544 crore.

CDMO or the contract manufacturing business is likely to grow at a rate of over 100%, but on a sequential basis, it may se a fall between 5% to 6%.

The company has a pipeline of over 110 active projects in the CDMO, of which 90 are in human health, and 20 are in animal health and crop protection.

The street is also anticipating ARV sales for the quarter to remain at ₹2,500 crore, but contribution to the topline may reduce to 36% from 45% by the next financial year.

Shares of Laurus Labs are trading 0.8% lower ahead of their earnings announcement.