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Shares of Laurus Labs (Laurus) surged 5 per cent. It has hit a record high of Rs 656.95 on the BSE in intra-day trade on Friday after the credit rating agency CARE Ratings upgraded its long-term banking facilities to CARE AA from CARE AA- with a stable outlook. The pharmaceutical company’s stock surpassed its previous high of Rs 641.95, touched on June 8, 2021.
“The revision in the ratings assigned to the bank facilities of Laurus is on account of significant improvement in the total operating income and profitability margins during FY21 (refers to the period April 01 to March 31) driven by volume sales under Formulation Dosage Forms (FDF) and Generic Active Pharmaceuticals Limited (API) such as antiretroviral and oncology segment, generation of healthy cash accruals providing the adequate liquidity comfort, continued incremental demand from existing clientele in non-ARV (Anti-retroviral) segment, completion of strategic acquisitions to augment growth in formulation and synthesis division,” CARE Ratings said in a press release.
The ratings continue to derive strength from experienced promoters having a long-term presence in the pharma industry, robust product portfolio with a visible presence in ARV, Oncology and Hepatitis C therapeutic segments, reputed and geographically diversified customer base with a strong flow of repeat business mitigating the sustainability of revenue risk, comfortable capital structure and improved debt coverage indicators, regulatory approvals from various regulators for the manufacturing and Research and Development (R&D) facilities of Laurus and stable outlook for the pharmaceutical industry.
Stock Covered in the news
