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Rs 70 to Rs 316: This stock has turned into a multibagger in one year

Aseem Thapliyal     November 27, 2020

Share of Laurus Labs has delivered strong returns to investors in last one year. Laurus Labs share price stood at Rs 70 an year ago and closed at Rs 316.15 on November 27, translating into gains of 347% during the period. In comparison, Sensex gained 7.43% during the period. An investment of Rs 1 lakh in the share a year ago would have grown to Rs 4.51 lakh today.

Laurus Labs stock has outperformed its peers in terms of returns during the last one year. Against 347% rise in Laurus Labs share, share of Sun Pharma could climb 11.41%.

While share of another pharma firm Divis Labs gained 99%, Dr Reddy's share rose 62.47% during last one year.  Cipla share could manage a gain of 59% during the same period.

The mid cap stock closed 8.52% or Rs 24.90 higher at Rs 317.15 today against the previous close of Rs 292.25 on BSE. The stock has gained 11.26% in the last two sessions after the pharma firm inked a definitive agreement to acquire 72.55% of Richcore's stake from Eight Roads Ventures and VenturEast for Rs 246.67 crore.

Market cap of the firm rose to Rs 16,999 crore on BSE. The stock has gained 11.85% in one week. The share stands higher than 5 day, 20 day, 100 day and 200 day moving averages but lower than 50 day moving averages.

The share of the pharma firm has delivered strong returns to investors supported by robust financial performance. Laurus Labs reported a 328% rise in Q2 net profit at Rs 242.7 crore against Rs 56.55 crore in the corresponding period of the previous fiscal.

Rakesh Jhunjhunwala earned Rs 2.71 crore per day with this stock for 100 sessions

Sales climbed 60% to Rs 1138 crore in the September quarter of the current fiscal against Rs 712.42 crore sales in Q2 of last fiscal.

In fact , net profit has risen constantly since September quarter of last fiscal.

In Q3 of last fiscal, the firm logged net profit of Rs 73.48 crore. In Q4, net profit rose to Rs 110.15 crore. During June quarter of current fiscal, the firm reported a net profit of Rs 171.78 crore.

On a yearly basis too, the firm logged a 172.26% rise in net profit. Net profit in March 2020 fiscal stood at Rs 255.27 crore against net profit of Rs 93.76 crore for the fiscal ended March 2019.

Jhunjhunwala earned Rs 5.6 crore per day with this stock for 111 sessions

Brokerage ICICI Direct has a positive stance on the stock. The brokerage gave a target price of  Rs 325 on September 29 this year. It gave a hold call for the stock when the share price stood at Rs 294.

Laurus Labs is an India-based manufacturer of active pharmaceutical ingredients (APIs) for anti-retrovirals (ARVs), oncology, cardiovascular, anti-diabetics, anti-asthma and gastroenterology. The company develops and manufactures oral solid formulations, provides contract research and manufacturing services(CRAMS) and contract development and manufacturing organization (CDMO) to the global pharmaceutical companies.

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