Laurus Labs to invest ₹200 cr on capacity expansion

G Naga Sridhar Hyderabad | Updated on August 07, 2018 Published on August 07, 2018

VV Ravi Kumar, Executive Director and CFO, Laurus Labs

Laurus Labs Ltd will invest ₹200-300 crore in capacity expansion over the next 12 months.

“The production capacity of active pharmaceutical ingredients (APIs) will be augmented by expansion of existing units,” its Executive Director and Chief Financial Officer VV Ravi Kumar told BusinessLine here on Tuesday.

The Hyderabad-based company has lined up expansion of its units 3, 4 and 6 located in Visakhapatnam. Laurus now has eight operational units — six in Visakhapatnam and two in Hyderabad.

The ₹2,098-crore company (FY18) derives a bulk of its revenue from APIs followed by ingredients, contract manufacturing and others. It has been stepping up its focus on the formulations business.

“We are now stepping up focus on formulations and expect the revenue to grow considerably in a couple of years from now,” Ravi Kumar said.

Laurus Labs’ formulations Unit 2 successfully completed inspections from various countries like Tanzania, Uganda, Kenya, Zimbabwe and Malawi. It had also received Global fund ERP (Expert Review Panel) approval for Tenofovir, Lamivudine and Dolutegravir (TLD). “This will enable us to participate in WHO and in country tenders,” the CFO added.

Emerging markets

By the end of the next fiscal, Laurus hopes to see “substantial” revenue from African markets. It has also been looking at the US, Europe and other emerging markets.

In the fourth quarter ended June 30, 2018, Laurus Labs posted decrease in net profit to ₹16.6 crore as against ₹38.9 crore in the same quarter last year. The revenue had, however, increased 13 per cent to ₹539 crore.

According to Ravi Kumar, while the revenue growth was driven by growth in ARV APIs, oncology and synthesis business; profit got adversely impacted by price increase in raw materials imported from China and forex loss, among others.

Published on August 07, 2018
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