Laurus Labs (LAUL.BO): 1Q27 above: Another strong quarter, remain Sell on valuation

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Laurus Labs (LAUL.BO): 1Q27 above: Another strong quarter, remain Sell on valuation

Goldman Sachs Laurus Labs (LAUL.BO)

this segment till FY28 - on the same the company has now in-licensed two ADC assets

from Aarvik for development and commercialization for India markets. It is also

progressing well to operationalize the commercial peptides manufacturing capacity (for

commercial scale validation) by Q2FY27. More importantly, Laurus expects CDMO to

continue ramping up in the coming quarters with a bias towards higher contribution

from late stage/commercial assets, primarily attributed to human and animal health

projects, implying strong growth in FY27E on a strong base of FY26. Laurus reiterated its

aspiration to reach 50% revenue contribution from CDMO business by FY30E.

On the Laurus Bio front, the construction work for commercial microbial fermentation

facility with over 400KL capacity in Vizag (due to be completed by FY27-end) remains on

track.

Generics business - FDF growth picks up, API growth impacted by non-ARV

business: The growth in the FDF business (+22% yoy) was driven by non-ARV

formulations, while soft performance in API segment (+3% yoy) was primarily on account

of slower growth in the non-ARV APIs (as ARV APIs reported a strong ~21% yoy growth).

We expect non-ARV FDF to continue to drive the medium term growth (KrKa JV P-1

bock to start mid-2027 focusing on onco and general OSDs) as the company ramps up

sales of recently approved ANDAs in addition to a couple of expected ANDA approvals,

while ARV business could remain range bound at Rs27bn (+/-2bn) annual sales.

Forward commentary: While the company did not provide quantitative topline

guidance for FY27, we note that the management has previously mentioned that it has