This is my first Thread/extensive research. Feel free to point anything wrong. Only for Educational Purpose.
Disc: Invested and biased. Invest at your own risk.
1. Value Chain
2. Business Segments
3. Segmental Information.

4. Recent Acquisitions
5. Business Structure
6. Plants
7. Capex
8. Growth
9. My Thesis
10. Anti-Thesis
11. Moat

• Today, we are among the world’s leading manufacturers of active pharmaceutical ingredients (API) for anti-retroviral (ARV), oncology, cardiovascular, antidiabetics, anti-asthma, and gastroenterology.

• Develop and manufacture oral solid formulations

• R&D team comprises of 750+ scientists (~16% of total employee strength) including over 60 PhDs

• Also provide contract research and manufacturing services (CRAMS)

• Produce specialty ingredients for nutraceuticals, dietary supplements and cosmeceuticals


From making just API’s (Active Substance), they now make all Advanced Intermediates they use and make formulations of the api’s they produce in the value chain.

(* shows backward & forward integration)

Business Segments

• Laurus Generics - API - Development, manufacture and sale of APIs and advanced

• Laurus Generics – Finished Dosage Form (FDF) - Development and manufacture of oral solid formulations from the api’s they make

• Laurus Synthesis - Key starting materials, intermediates and APIs for New Chemical Entities (NCEs)
• Laurus Bio – Recombinant products - animal origin free products for safer and viral free bio manufacturing

Quick update : now only 3 : Generics(API,FDF) , Synthesis, Bio

Segmental Information
1. Laurus Generics – API

ARV API: Anti-Retroviral used in the treatment of HIV-AIDS. This is a 3yr tender driven business. When 1st line of drugs fails, then 2nd line of treatment drugs are given.

(Growth will be at max 5-8%)


(source: soicfinance)
• Hepatitis C: Approved for Tenofovir Alafenamide used in the treatment of chronic hepatitis B virus infection with compensated liver disease.

• Non-ARV:
o anti-diabetic: 2 products already validated
o Cardiovascular: conditions affecting the heart or blood vessels

o anti-asthma: Breathing problems
o gastroenterology: focused on the digestive system and its disorders
o Proton Pump Inhibitors (PPIs): reduction of stomach acid production

2. Laurus Generics – Formulations

Development and manufacturing of oral solid formulations for low and middle-income countries (LMIC), North America and European Union (EU) markets

Formulations are made using API’s they make. (Types of formulations are same as API’s)

3. Laurus Synthesis (CDMO)

• Steroids and hormone manufacturing capability

• specialty ingredients for use in nutraceuticals, dietary supplements and cosmeceutical products.

4. Laurus BIO

Acquired 72.55% stake in Richcore Lifesciences and renamed to Laurus Bio.

Entering high-growth areas of recombinant animal origin free products (nonanimal cultured meat)

Laurus Bio operates through three distinct revenue streams – biotech, enzymes and CDMO

Going ahead, the CDMO segment is likely to be a major contributor to growth as a major portion of the incremental capacities are towards this business.

( clear play on operating leverage hinted ) *biased

Recent Acquisitions

[JAN 21] Acquired 72.55% in Richcore Lifesciences to enter Biologics. Renamed to Laurus Bio Private Limited.

[JAN 22] to acquire 26.62% stake in Immunoadoptive Cell Therapy Private Limited (lmmunoACT), an advanced cell and gene therapy company.

Treatment for Immuno deceases and particularly for Cancer treatment.

This investment provides Laurus an access and entry into CAR-T therapy.

A very promising treatment option which has had great success in the western part of the world.

In India, CAR-T therapy is not available, and this collaboration will help us in bringing this novel technology to the Indian patients at a very affordable pricing.

Must Read on this here : https://twitter.com/itsTarH/status/1461635789071151109?s=20

( can be fully acquired in the coming years )

Business Structure


( Too much concentration in Vishakhapatnam. Now, diversifying)


(status and capacity shows how much more capacity is being added)

GROWTH via Capacity Expansion:

API’s: +21.56% increase when done(ongoing)

Formulations: +66.66% increase starting from FY23(Mar2022)

Synthesis: now 5535KL capacity. More coming in FY 2023,2024,2025.

Bio: +90KL fermentation capacity to the existing 90KL.


Walking the Talk & Excellent Capital Allocation: Revenue mix has improved from ARV to other segments and also shows excellent capital allocation of taking cashflow from a lumpy ARV api business into Non-ARV api’s, backward integration into intermediates

forward integration into formulations, synthesis(CDMO) and now Bio.

Laurus API & Formulations: Diversification from ARV api to Anti-diabetic, cardiovascular and others.

Formulations are now also going to be done for NON-ARV api’s (start of FY23).

Laurus Synthesis: Developing capacities where once operating leverage kick’s-in, it’s a bomb. (fixed cost + lower incremental costs and exponential revenues)

Laurus Bio: sky is the limit. hinted for 1mil, then 3-4mil capacity. so, ~5x, then ~19x revenue from bio if done.

Addition of high Potent Molecules from 2025: Maybe because they are currently working on it (HIGH PROBABLITY) but the existing drugs might go off patent in 2025.

Dr. Satyanarayana Chava: "These launches will happen after 2025."

Injectables: They currently only do oral solids. They used to doge injectables. But, in the Nov’21 concall, finally they said of entering into the segment.


Raw Material: High Dependence on Raw Material imports from China.

Injectables: Not easy to get process expertise. Then comes approvals. Then comes manufacturing part.

Regulatory Risks: The major risk in the company is any USFDA export ban on the facilities.

Wipeout of ARV api’s: Recently there has been a clearance of a new injectable drug, that can replace ARV drugs consumed in oral solids way (pills, tablets) as it is 1/4th the cost and less dosage.

Must read: https://twitter.com/Dr_Midhun_cs/status/1463165201809825792

Also, ARV api is a tender driven business (3 years). If their customers don’t win bids, they might have some revenue fall.

High Freight Charges: The company had to suffer a bit in their earnings for the freight charges due to less availability of containers.

So, we must have this in our mind if this thing comes again in future.

Laurus Bio unable to scale: Considering Bio a new stream, if this segment does not grow, things can go wrong.

Debt: Even tough the debt is ok considering the upcoming growth, (D/E = 0.53).

However, the upcoming greenfield capex in the 3-4 land acquired can be a pain point as well.

They weren’t looking to reduce debt as growth opportunity was very good.

Now suddenly, within 3-4 months, they say, debt reduction might happen in the next year.


• USFDA approvals & compliance is not easy

• Biologics is a high gestation & high investment area within the Pharma industry. Typical development times range in many years and take about 5+ years on average to really scale up and transition to commercial production

(from, Tar’s tweet mentioned earlier)
• Economies of scale in ARV api. Replication in non-arv api expected.
• Backward and forward integrated which helps them absorb price hikes of solvents/KSM.

Valuations, abb, ye aap log decide karlo, coz, neend aa ri ab. gd nt. Else, i'll do it tmrw.

But, it is a very long term bet.. the real story will start when cdmo starts picking up.. from FY24 and FY25.

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