Laurus Labs – Can Business Transform to Next Level?

While there are many negatives in the results. There are a few positives

1. gross Margin at 50%+ which is moving closer to the peak Margins
2. the gross Margins didn’t flow over to Ebidta and Pat Margin as they on boarded people for new capacities ( which are not commercial yet) and the trial runs at new Capex also takes some cost

So, once the Capex starts contributing EBIDTA Margins should move towards 25% and may be reach 28-29% in 2-3 years time as the CDMO business pie grows

If we assume the Co makes 8000 cr revenue and 25% Margin in FY 25, the Co is trading at 12-13x Ebidta multiple, which is not cheap by any means.