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Business Standard
11 minutes ago
- Business Standard
Laurus rallies 6%, hits new high on strong Q1; brokerages see more upside
Laurus Labs share price today Shares of Laurus Labs hit a new high of ₹889.3, surging 6 per cent on the BSE in Monday's intra-day trade in an otherwise subdued market after the company reported strong earnings for the June 2025 quarter (Q1FY26). The BSE Sensex was up 0.06 per cent at 81,512 at 10:20 AM. In the past one month, the stock of pharmaceutical company has outperformed the market by soaring 27 per cent, as compared to 2.7 per cent decline in the BSE Sensex. It has zoomed 128 per cent from its 52-week low of ₹390.30 on August 8, 2024. Laurus Labs - Q1FY26 performance, outlook Laurus delivered a solid performance in Q1, in line with market expectations. The management said they are pleased to see sustained growth momentum fueled by increasing uptake in the contract development and manufacturing organisation (CDMO) deliveries and healthy business fundamentals. The company has achieved revenues of ₹1,570 crore, representing 31 per cent year-on-year (YoY) growth and earnings before interest, taxes, depreciation, and amortization (EBITDA) of ₹389 crore, representing 127 per cent growth. The EBITDA margins improved substantially to 24.8 per cent, from 14.3 per cent in Q1FY25, supported by continuing operating leverage. Gross margins stood strong at 59.4 per cent due to favorable CDMO mix and ongoing process improvement initiatives. Profit after tax stood ₹161.1 crore, driven by a favorable product mix and strong operational performance. Laurus has made a healthy progress to start the year with increasing contributions from the CDMO business and continued advancement of pipeline projects, supported by Generic Formulation (FDF). The management said the company is moving ahead with strong focus on commercial execution realizing the full potential from promising pipeline opportunities, business development and rapidly enhancing scale and technology capabilities. ALSO READ | Brokerages firm see more upside in stock price of Laurus The CDMO growth was driven by several mid-to-late stage NCE deliveries and steady increase in sales from new manufacturing assets. Out of ₹3,200 core of capex that the company has incurred during FY22-25, almost ~75 per cent was earmarked towards active pharmaceutical ingredient (API) / CDMO. The company is now getting the benefit of the same as the CDMO quarterly run rate has gone up from ₹220-250 crore to ₹450-500 crore in two years. The CDMO contribution has also gone up from ~16 per cent to 33 per cent which has led to a significant margin expansion. ICICI Securities said they continue to monitor progress on these driving factors which in a way are expected to change the business mix in favour of these segments in lieu of anti-retroviral (ARV). Analysts at Choice Equity Broking believe Laurus is evolving from a traditional Generics player to a CDMO (Synthesis)–led model, with the segment targeted to reach ~50 per cent of revenues in the long term. Given the higher-margin profile of CDMO and operating leverage as new manufacturing assets ramp and current underutilization narrows, the brokerage firm expects sustained margin expansion. Analysts maintain 'buy' rating on the stock with revised target price of ₹1,025 against previous target price of ₹750. Motilal Oswal Financial Services raise earnings estimates by 16 per cent/7 per cent for FY26/FY27, factoring in strong tailwinds in CDMO segment led by 110+ active pipeline projects/ramp-up from new manufacturing facilities, additional contracts in generic FDF segment, and margin expansion from scale. Considering a 63 per cent earnings compounded annual growth rate (CAGR) over FY25-27, the brokerage firm value Laurus at 56x 12M forward earnings to arrive at a target price of ₹970. Reiterate BUY.
Economic Times
11 minutes ago
- Economic Times
IEX shares slide 9% as market coupling fears continue to drag, brokerages cut targets
Shares of Indian Energy Exchange (IEX) fell as much as 8.9% on Monday, July 28, to Rs 132.15 on BSE, as renewed selling pressure weighed on the stock amid persistent concerns over market coupling — a regulatory shift that threatens the company's dominance in power trading. ADVERTISEMENT The decline comes after IEX shares rebounded 13% on Friday, following the release of strong Q1 FY26 results. That rally offered temporary respite to investors after the stock's record single-day plunge of nearly 30% on Thursday, when the Central Electricity Regulatory Commission (CERC) approved market coupling – a move widely viewed as a structural threat to the company's business model. On Thursday, the sell-off triggered massive trading volumes, with 12.77 crore shares worth Rs 1,740 crore changing hands, surpassing the combined volumes of all 16 earlier trading sessions in July. Over 43.75% of the shares traded on the NSE were marked for delivery, indicating a sharp churn in investor positions. Brokerages have flagged the CERC's order as a significant threat to IEX's pricing power and market said the regulation 'disrupts IEX's monopoly in the DAM market by introducing uniform price discovery across exchanges. This levels the playing field, impacting IEX's moat of price determination.' ADVERTISEMENT The brokerage expects IEX's share in the DAM and RTM segments (currently 99% of FY25 volumes and 80–85% of sales) to fall to 70% by FY27. 'A price war-led trading margin cut is likely, from 4p/kWh to 3.5p/kWh by FY28E,' Nuvama said, retaining a 'reduce' rating with a target price of Rs 133, down from Rs said that market coupling will accelerate IEX's market share losses, projecting a decline from over 80% in FY25 to 50% by FY28. 'The market coupling threat has become a reality… The regulation has taken away [IEX's liquidity advantage] as all power exchanges will have a uniform clearing price,' it said. Jefferies cut its price target to Rs 105 from Rs 150 and maintained an 'underperform' rating. ADVERTISEMENT Elara Capital also flagged 'significant pressure on IEX,' noting that CERC has approved phased implementation of market coupling, starting with the day-ahead market (DAM) by January 2026. 'This poses a major threat to Indian Energy Exchange's dominance, as market coupling could shift volume to rival exchanges,' it said, adding that IEX could be forced to lower trading margins to retain market Q1 FY26 performance briefly supported the stock last week. The company reported a 25% year-on-year (YoY) rise in consolidated net profit to Rs 120 crore, compared to Rs 96 crore a year earlier. Revenue climbed 19% YoY to Rs 184.2 crore, driven by robust trading activity. Electricity volumes rose 14.9% YoY to 32.4 billion units, while Renewable Energy Certificates (RECs) surged 149.3% YoY to 52.7 lakh units. ADVERTISEMENT 'The company is currently undertaking a detailed impact assessment of the implications of [market coupling] and will keep stakeholders informed of any further developments,' IEX said in its post-results analysts caution that earnings momentum could soften as regulatory reforms reshape market dynamics. 'With the core business model under pressure and limited clarity on long-term profitability, markets have rightly reacted. For IEX, the days of monopoly-like pricing power may now be history,' said Harshal Dasani, Business Head at INVasset PMS. Also read | Understand 'Market Coupling Approved' before reacting to IEX stock price movement and making any decision (Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Economic Times
11 minutes ago
- Economic Times
Vijay Kedia portfolio takes a Rs 71 crore hit on Atul Auto this year — What to do ahead of Q1 results?
Vijay Kedia's portfolio, valued at over Rs 1,200 crore, has taken a Rs 71 crore knock from Atul Auto so far this year. The stock has been on a prolonged losing streak, falling over 20% year-to-date, and market experts see further challenges ahead for the three-wheeler maker. ADVERTISEMENT Atul Auto, which is Kedia's largest single equity bet in terms of the holding value, has been on a downturn since hitting the 52-week high of Rs 755 on the BSE. On Friday, this smallcap counter with a market capitalisation of Rs 1,270.31 on the NSE, closed at Rs 457.75. This is a 39% drop from its peak. Kedia held over 58 lakh shares representing 20.91% stake in Atul Auto in his name and through Kedia Securities Private Limited. The current holding value of Atul Auto is worth Rs 265 crore. This stake has not changed since the September quarter of 2023, according to the data fetched from Ace Rs 71 crore figure is the decline in the value of shares this year, and does not indicate a loss for the ace investor. The stock could be in focus ahead of its Q1 results announcements due on August 7. ADVERTISEMENT "Atul Auto is a reputed manufacturer and seller of auto rickshaws in both domestic and international markets. Currently, it is one of the fastest-growing three-wheeler companies in India," V.L.A. Ambala, a Sebi-registered Research Analyst and Co-founder of Stock Market Today said. Decoding the technical charts, she said that the stock is trading near its 200-week and 20-month moving averages, which suggests there could be an opportunity for gradual buying over the next 7 to 15 days. "Those interested may consider entering positions in the buying range of Rs 410 to Rs 460 and set price targets between Rs 530 and Rs 800. However, I suggest they adhere to a stop-loss at Rs 390 to manage risk effectively," Ambala suggested. ADVERTISEMENT Fundamentally, the current valuation of Atul Auto remains stretched, she opined, suggesting that its P/E ratio stands at 57.91 and much higher than the sector PE of 19.93. Meanwhile, its P/B ratio is 2.84 while ROE (Return on Equity) is quite low at 2.02%.Anuj Gupta, Director at Ya Wealth Global Research said that the stock has been trading in a range over the last couple of months and expects the trend to continue, going ahead. He sees strong support at Rs 440 and resistance at Rs 480. ADVERTISEMENT The company reported a strong January-March quarter, posting a 34% year-on-year jump in its consolidated net profit at Rs 7 crore. The total revenue in the said quarter stood at Rs 212 crore, growing 31% has invested in 14 stocks and his other bets with significant holding value include Neuland Laboratories (Rs 179 crore), TAC Infosec (Rs 136 crore), Elecon Engineering (Rs 130 crore) and Sudarshan Chemical (Rs 125 crore). (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
