LAURUSLABS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.9
| Stock Code | LAURUSLABS | Market Cap | 50,212 Cr. | Current Price | 930 ₹ | High / Low | 1,141 ₹ |
| Stock P/E | 62.7 | Book Value | 91.1 ₹ | Dividend Yield | 0.13 % | ROCE | 9.47 % |
| ROE | 7.75 % | Face Value | 2.00 ₹ | DMA 50 | 1,021 ₹ | DMA 200 | 877 ₹ |
| Chg in FII Hold | 0.35 % | Chg in DII Hold | 0.70 % | PAT Qtr | 175 Cr. | PAT Prev Qtr | 216 Cr. |
| RSI | 28.8 | MACD | -24.5 | Volume | 18,08,120 | Avg Vol 1Wk | 29,83,959 |
| Low price | 512 ₹ | High price | 1,141 ₹ | PEG Ratio | -2.70 | Debt to equity | 0.37 |
| 52w Index | 66.5 % | Qtr Profit Var | 206 % | EPS | 14.8 ₹ | Industry PE | 29.0 |
📊 Financials: Laurus Labs shows moderate profitability with ROE at 7.75% and ROCE at 9.47%, which are below industry averages. Debt-to-equity ratio of 0.37 indicates manageable leverage. Quarterly PAT has declined from 216 Cr. to 175 Cr., reflecting short-term pressure. EPS stands at 14.8 ₹, but margins remain thin.
💹 Valuation: Current P/E of 62.7 is significantly higher than the industry P/E of 29.0, suggesting overvaluation. P/B ratio is ~10.2 (930 ₹ / 91.1 ₹), which is steep. PEG ratio is negative (-2.70), indicating weak earnings growth relative to valuation. Intrinsic value appears lower than current market price, making the stock expensive.
🏭 Business Model & Competitive Advantage: Laurus Labs operates in pharmaceuticals and APIs, with diversification into formulations and biotech. The company benefits from scale and established client relationships, but faces margin pressures and intense competition in generics.
📈 Entry Zone: Considering RSI at 28.8 (oversold territory) and DMA 200 support near 877 ₹, an entry zone could be 850–880 ₹ if long-term conviction exists. However, valuations remain stretched, so accumulation should be cautious.
🕰️ Long-Term Holding Guidance: The company has growth potential in biotech and formulations, but current valuations and declining profitability suggest waiting for better earnings visibility before aggressive long-term holding.
Positive
- Strong industry presence in APIs and formulations.
- Debt-to-equity ratio at 0.37 shows financial stability.
- RSI indicates oversold levels, potential rebound zone.
- Institutional investors (FII/DII) increasing holdings.
Limitation
- High P/E (62.7) compared to industry average (29.0).
- Declining quarterly PAT (175 Cr. vs 216 Cr.).
- Low ROE and ROCE relative to peers.
- Negative PEG ratio highlights weak growth prospects.
Company Negative News
- Profit margins under pressure due to rising costs.
- Recent quarterly earnings decline raises concerns.
Company Positive News
- Expansion into biotech and formulations diversifies revenue streams.
- Institutional investors increasing stake signals confidence.
Industry
- Pharma sector has strong long-term demand drivers (healthcare, generics, biotech).
- Industry P/E at 29.0 indicates moderate valuation compared to Laurus Labs.
Conclusion
⚖️ Laurus Labs is fundamentally stable but currently overvalued with weak profitability metrics. Entry is advisable only near 850–880 ₹ for long-term investors with patience. Better earnings visibility and margin improvement are needed before strong conviction in long-term holding.
Would you like me to also prepare a comparative HTML table showing Laurus Labs vs. industry averages for quick visualization?