Laurus Labs under pressure, plunges 10% after multiple block deals

As on March 2020, two overseas corporate bodies held a combined 27.1 million shares or 25.36 per cent stake in Laurus Labs.
Shares of Laurus Labs slipped 10 per cent to Rs 440 on the BSE in the noon deals on Friday after a more than 30 million equity shares of the pharmaceutical company changed hands via multiple block deals.

At 12:44 pm, the stock was trading 8 per cent lower at Rs 449 on the BSE, as compared to a 1.5 per cent rise in the S&P BSE Sensex. A combined 34.4 million equity shares, representing 32.2 per cent of total equity of Laurus Labs, changed hands on the BSE and NSE.

On BSE, around 19.1 million shares were traded, while on the National Stock Exchange (NSE), about 15.3 million shares changed hands on the counter, the exchange data shows. The name of the buyers and sellers were not ascertained immediately.

As on March 2020, two overseas corporate bodies held a combined 27.1 million shares or 25.36 per cent stake in Laurus Labs. The promoters including Satyanarayana Chava held a combined 32.04 per cent stake in the company, the shareholding pattern data shows.

With today’s fall, the stock of Laurus Labs has declined 18 per cent from its 52-week high level of Rs 536, touched on April 28, 2020. In April, the stock zoomed 59 per cent, as compared to a 14.4 per cent rise in the S&P BSE Sensex.

For January-March (Q4FY20) period, the company reported a healthy performance as consolidated net profit more-than-doubled to Rs 110 crore from Rs 43 crore in the year-ago quarter.

Total revenue showed a robust growth of 32 per cent at Rs 839 crore for the quarter against Rs 635 crore in the corresponding quarter of the previous fiscal. The company’s earnings before interest, taxes, depreciation, and amortization (ebitda) grew 70.5 per cent year-on-year (YoY) at Rs 193 crore, while margins improved 510 basis points (bps) at 23 per cent YoY during the quarter.

The non antiretroviral (ARV) active pharmaceutical ingredients (API) business pie to contribute more than 50 per cent of the company’s total revenue, mainly driven by finished dosages formulations (FDF). The change in revenue and product mix to generate better profitability and margins.

The management said partnership with global fund offers higher volume contracts with reasonable predictability in FDF tender business having higher revenue visibility. The company has a healthy order book for FY21 and beyond in FDF contract business with a strategic partner in EU. The robust growth in Other API segment to continue on the back of higher order book visibility from key therapeutic segments like CVS, Anti Diabetic and PPIs, it added.

Meanwhile, the board has recommended for the sub-division of equity shares of the Company from existing face value of Rs 10 each to face value of Rs 2 each (i.e. split of 1 equity share of Rs 10 each into 5 equity shares of Rs 2 each), subject to regulatory approvals.

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