Laurus Labs: Q1FY25 Earnings Call Highlights
Laurus Labs: Q1FY25 Earnings Call Highlights
Flattish revenue growth in Q1-FY25. However, management expects a significant pick-up in performance during the second half of the year
lauruslabs.com | NSE: LAURUSLABS
Overall Performance
Flattish Revenue Growth: Revenue for Q1 FY25 was Rs. 1,195 crores, a 1% increase YoY. However, management expects a significant pick-up in performance during the second half of the year.
Strong Gross Margins: Gross margins remained healthy at 55% due to favorable product mix and cost savings achieved through raw material price negotiations.
Subdued EBITDA Margins: EBITDA margins remained at 14% due to lower asset utilization and investments in growth projects and new initiatives.
Key Business Highlights
CDMO Division
Continued operational and commercial improvements with revenue at Rs. 214 crores.
Significant resource allocation towards clinical phase deliveries.
Growing customer confidence in Laurus's technology platform and capabilities.
Healthy growth outlook expected for the full year.
Multiple RFPs in progress from big pharma and large Biotechs.
Over 70 active projects, ongoing commercial supplies for about 10 products.
Generic API Division
Revenue at Rs. 664 crores with 10% growth YoY.
Strong oncology delivery and firm demand in ARV volumes.
Oncology APIs reported 120% growth YoY.
Continued focus on cost leadership in select high-value APIs.
Generic Formulation Space
Overall revenue at Rs. 274 crores, down 4% YoY.
Strategic JV with KrKa progressing well.
Expanding CMO collaboration with additional oral solid dosage manufacturing lines at Vizag site.
LMIC Business
Market volumes remain stable.
Continued optimization program to counter pricing impact.
Focus on increasing volume share on selected products in the US.
R&D
R&D spending to sales for Q1 FY25 was 5.4%, up 35% YoY.
Increased spending towards initiatives in cell and gene therapy assets.
Bio Division
Revenue at Rs. 43 crores.
Diversifying application of CDMO services.
Discussions underway with strategic customers for long-term collaborations.
Building larger fermentation capacity in Vizag, expected to be commissioned by June 2026.
Quality
Company successfully passed 32 quality audits by regulatory agencies and customers without any critical findings.
US FDA inspection of two large API manufacturing facilities completed with no critical findings.
Investment Outlook:
FY25 Growth Outlook: Management remains confident in delivering on the FY25 growth outlook with a strong focus on high-value business segments.
CAPEX: Investments in the next 2 years are expected to be around Rs. 1800-2000 crores, mainly focused on CDMO and FDF expansion.
Margins: Management is confident in maintaining healthy gross margins (around 50%) despite pricing headwinds in APIs.
Future Growth Drivers: CDMO, Animal Health, Crops and Ingredients, and late-stage clinical projects are key drivers for future growth.
Overall, while Q1 FY25 results were largely in line with expectations, investors should remain optimistic about Laurus's future prospects, particularly due to their strong CDMO business and commitment to delivering high-value projects.
Source: Link to Earning Call Transcripts
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