Motilal Oswal's research report on Laurus Labs
Laurus Labs (LAURUS) has agreed to acquire a 26.6% stake in ImmunoACT for a consideration of INR460m, implying enterprise value of INR1.7b. ImmunoACT currently has four CAR-T cell molecules, with one of them undergoing clinical trials. CAR-T cell is a new therapy for Leukemia/Lymphoma, with USD1.5b in worldwide sales of five commercialized products. Given that ImmunoACT products are under development, the commercialization would be subject to a successful clinical outcome. However, this represents LAURUS' entry for a potential CDMO opportunity into a new therapy space over the next 4-5 years. We remain positive on LAURUS on the back of a scale-up in CDMO (Synthesis/Biologics), market share gains in the Non-ARV segment, and growth potential in the Non-ARV business. We continue to value LAURUS at 24x 12M forward earnings to arrive at Target Price of INR690. Maintain BUY.
Outlook
We expect a 21% earnings CAGR over FY21-23E, led by a 42%/30%/3% sales CAGR in the Synthesis/FDF/API segment and ~80bp margin expansion. We value LAURUS at 24x 12M forward earnings to arrive at our TP of INR690.
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