Consolidated profit before tax was at Rs 40.58 crore in Q1 FY24, registering de-growth of 88.6% from Rs 355.88 crore posted in the corresponding quarter last year.

EBITDA slipped 63% year on year to Rs 168 crore in the quarter ended 30 June 2023. EBITDA margin reduced to 14.2% in Q1 FY24 as compared to 29.5% reported in the same period a year ago.

Research and development (R&D) expenditure during the quarter stood at Rs 47 crore, constituting 4% of the revenues.

Laurus Labs' formulation business declined 18% to Rs 285 crore in Q1 FY24 from Rs 349 crore recorded in Q1 FY23. The segment's growth was mainly impacted by lower offtake in ARV business by global agencies. However, the ARV demand is firming up and expected to have better revenue in future and higher generic volumes in existing/new launches in developed market to drive FY24 growth.

Income from API business rose 2% to Rs 597 crore in Q1 FY24, due to temporary impact in other API (down 42%) and Onco (down 59%). It is expected to rebound from Q2 as CMO opportunities in high growth APIs continue to look better.

The revenue from company's synthesis division slumped 57% YoY in Q1 FY24 to Rs 250 crore. The pharma firm said that the revenues declined due to a YoY comparison given large PO executed last year. Otherwise, baseline business tracking healthy and project pipeline continued to scale up.

The bio division recorded revenue of Rs 50 crore in Q1 FY24, up by 67% on YoY basis. The company said that the growth was supported by traction in CDMO business, Greenfield R3 site strengthened Laurus' capabilities in AOF proteins and growth factors.

Dr. Satyanarayana Chava, founder and chief executive officer, said, “While our operating results this quarter were primarily impacted by lower sales, operational deleverage and elevated expenses, the underlying demand for key growth portfolio within Non-ARVs generics and CDMO progress remains strong and healthy. ARV business has incrementally stabilised on overall basis and therefore we remain optimistic in our H2 growth prospects as indicated earlier.

During the quarter, Laurus continued to advance its R&D driven commercial strategy by successful signing its first multi-year commercial partnership in Crop science and further deepening commitment into emerging CGT technology platform. Our CDMO growth projects are on track with Animal health manufacturing block commissioned recently and dedicated R&D centre coming online in late FY24.”

V V Ravi Kumar, executive director & chief financial officer said, “We achieved Rs 1,182 crore in revenue, representing 23% decline, and Rs 168 crore EBITDA, resulting to 14.2% margin. Performance mainly affected by operational deleverage, material drop in the CDMO business, price fall in ARV portfolio over last year. We are anticipating rebound from H2, with recovering revenue trend, positives from cost improvement programs and raw material price stabilisation. Our future capex projects towards strengthening CDMO and Bio division is advancing as per schedule and Debt leverage position remains comfortable”

Laurus Labs is a fully integrated pharmaceutical and biotechnology company, with a leadership position in generic Active Pharmaceutical Ingredients (APIs) and a major focus on anti-retroviral, oncology drugs, Cardiovascular, Gastro and Hepatitis C therapeutics. The company also develops and manufactures oral solid formulations, provide contract research and manufacturing services (CRAMS) to Global pharma companies.

The scrip rose 0.72% to end at Rs 343.80 on the BSE.