In recent trading, Laurus Labs experienced a 6 percent decline on September 12, following a downgrade from Kotak Institutional Equities, which shifted the stock’s rating from ‘reduce’ to ‘sell’. Interestingly, the target price remained steady at Rs 300. The decision comes in light of Kotak’s assessment that, despite a challenging first quarter of FY24, Laurus Labs’ stock had surged by 20 percent, largely driven by optimistic expectations regarding the Synthesis segment and the belief that the worst is now behind them.
Currently, Laurus’ Synthesis segment commands a premium of over 25 percent compared to Syngene. However, Kotak Institutional Equities has expressed difficulty justifying this premium, given the substantial disparities in capabilities and size between the two entities.
As of 11:05 am, the company’s shares were trading at Rs 386.05 on the BSE, marking a 5.1 percent decline.
Laurus Labs, which heavily relies on antiretroviral (ARV) active pharmaceutical ingredients (APIs) and formulations, has announced a strategic shift towards non-ARV products targeting diabetes and cardiovascular health to fuel future growth. While Synthesis is expected to achieve robust medium-term growth, it is unlikely to fully compensate for the sluggish performance of ARV until at least FY26.