Laurus Labs Q3FY22 Results: Profit rose 43% YoY to Rs 155 crore

Drugmaker Laurus Labs on Thursday reported a 43.21 per cent YoY decline in the consolidated profit at Rs 154.95 crore for the quarter ended December 31, 2021 (Q3FY22). It had posted a profit of Rs 272.85 crore in the corresponding quarter of the previous financial year (Q3FY21).

The company's revenue from operations fell 20.15 per cent YoY to Rs 1,028.76 crore against Rs 1,288.42 crore posted last year.

Its EBITDA (earnings before interest, taxes, depreciation, and amortization) dropped 33.07 per cent to Rs 285.29 crore for the reported quarter as against Rs 426.26 crore posted last year. Margin contracted to 28 per cent in Q3FY22 as against 33 per cent posted in Q3FY21.

Dr. Satyanarayana Chava, Founder and Chief Executive Officer, said, "Our 9MFY22 results reflect operational resilience overall with better mix and sustained profitability despite lower revenue from ARV APIs and formulations. Our Q3 results were impacted by lower sales of ARV APIs and formulations due to stocking at channel partners and we expect improvement from Q4. However, Strong momentum in our CDMO business continued this quarter with over 60 per cent growth and also seen a healthy rebound in API business (ex-ARV) with activity levels picking up. We continue to sharpen our execution as we focus on positioning our businesses for sustainable long-term growth".

Business Highlights:

Overall

♦ Total Income for 9months at Rs 3,511 crore with 3 per cent growth and for Q3 FY22 at Rs 1,029 crore declined by 20 per cent (YoY). The growth was impacted due to transient inventory correction of ARV business.

♦ Core results continue to remain resilient with Strong growth in Synthesis (+62 per cent), and Other APIs (+38 per cent). Drag in ARV business is sharper than expected and appears to have bottomed out.

♦ R & D spent of Rs 148 crore and 4 per cent of sales in 9M FY22.

Generic FDF

♦ FDF business generated revenue of Rs 1389 crore for first 9 months with 13 per cent growth whereas in Q3 with Revenues declined by 13 per cent YoY to Rs 373 crore.

♦ Expect rebound backed by increased demand for ARV business. Developed markets sales will enhance based on new approvals and launches.

♦ 1 product Dossier filed in Developed markets in Q3 taking total filings to 8 products for 9MFY22.

♦ Cumulatively filed 30 ANDAs in the US with 14 PARA IV filings and 10 FTF opportunities

♦ Brownfield expansion to add significant capacity should be operational by the beginning of FY23

Generic API

♦ API business reported revenue of Rs 1500 crore for the first nine months with de-growth of 18 per cent whereas for Q3 revenue de-grown by 42 per cent YoY to Rs 424 crore.

♦ Other APIs and Oncology Revenues continued to normalize faster and saw good traction overall (+38 per cent & +33 per cent YoY).

♦ ARV business impacted due to slightly prolonged channel de-stocking – Continue to believe that this is transient.

♦ Filed 315 patents out of those 177 patents granted as of December 31, 2021

♦ Filed 71 DMFs to date

Synthesis

♦ Delivered strong growth of 62 per cent for the first nine months and 63 per cent in Q3 YoY to Rs 207 crore.

♦ Sustained new client addition and increased business from existing customers.

♦ Expansion in CDMO capability on track to include new opportunities and extended service.

♦ Greenfield investment to set up a dedicated R&D centre and manufacturing units are progressing as per our expectations.

Bio Division

♦ Segment Sales were largely stable and Clocked sales of Rs 25 crore.

♦ Commissioned remaining two Fermentors taking the total operational capacity to 180KL as of December 2021. Subsequent benefits of the full operational capacity to reflect from Q4 onwards.

♦ Acquiring Additional land parcels to Create close to 1 million litres fermentation capacity.