laurus1Laurus Labs is coming out with an IPO on  6th December 2016 with a price band of Rs. 426 to Rs. 428, to raise upto Rs. 300 crore via fresh issue of equity shares of Rs. 10 each and an offer for sale (OFS) of upto 2.41 crore equity shares by the PE investors. A peer analysis of the company has been done to evaluate its financial performance in comparison to its peers with a view to help investors to evaluate if the issue is priced at a fair price from the point of subscribing to the IPO.

Related Links: Laurus Labs Limited: IPO Analysis   http://wp.me/p7zwuc-kn Laurus Labs Limited: Anchor Investors & Brokerage Recommendations  http://wp.me/p7zwuc-ku

Laurus Labs is mainly into manufacture  of active pharmaceutical ingredients (APIs), which account for about 90% of  its revenue. The APIs mainly serve  the therapeutic areas of anti-retrovirals (ARV), followed by  Hepatitis C and Onclogy. Other areas include  finished dosage formulations, Contract development and manufacturing services and specialty ingredients .

Comparison with Peers based on financials of Year 2016 &  previous years. (Figures in Rs. Crore)
` Laurus Aurobindo Divis
Revenue from Operations 1,817.18 13,896.00 3,721.33
Operating Profit 391.94 3,205.56 1398.8
OPM 21.57% 23.07% 37.59%
Profit Before Tax 167.56 2,722.46 1,371.84
Net Profit 132.65 1,982.00 1,107.69
NPM (%) 7.30% 14.26% 29.77%
share Capital 98.75 58.52 53.09
Face Value 10.00 1 2
EPS (Rs) 13.43 33.87 41.73
Market /Issue Price 428.00 719.55 1135.85
P/E 31.87 21.24 27.22
Net worth 851.82 7,056.73 4,350.14
RoNW (%) 15.57% 28.09% 25.46%
NAV (Rs) 94.07 140.94 183.67
P/BV 4.55 5.11 6.18
ROCE 15.3 29.53 45.45
CAGR sales 3 yrs 35.93% 33.38% 20.46%
CAGR Sales 1 yr 35.82% 13.79% 16.91%
CAGR NP 3 Yr 14.57% 87.89% 21.96%
CAGR NP  1 yr 94.02% 33.50% 10.37%
Laurus Labs Limited has turned out a good performance in the year 2016 & half yearly results for the 6 months ended Sept 2016 are also encouraging. While this peer analysis does not bare the potential it may hold in coming years, based on past performance  and broad financial ratios, the issue seems to be richly priced compared to peers Aurobindo Pharma & Divis Lab both of which seem to be on a much stronger wicket.