Laurus Labs

Source: The Hitavada      Date: 25 Dec 2016 09:20:56

COMPANY: Laurus Labs is a pharmaceutical company with leadership position in generic
Active Pharmaceutical Ingredients (“APIs”) for select, high-growth therapeutic areas of
Anti-Retrovirals (“ARVs”) and Hepatitis C. The company also manufactures APIs in Oncology and other Therapeutic areas. The strategic and early investments in R&D and manufacturing
infrastructure have enabled them to become one of the leading suppliers of APIs in the ARV
therapeutic area to multi-national pharmaceutical formulation companies which cater to the
large and fast-growing “Donor-Funded Access-to-Medicines Markets” of Sub-Saharan Africa,
South-East Asia and Latin America.
View: Although it is growing at a faster pace than its peers (FY14-16 revenue CAGR of 24% v/s 12% for peers), company’s return ratios are below par (ROCE of 16% v/s 23% for peers) and also commands valuations that are 27% above peer group average (30.1x v/s 23.7x for peers