Shares of drug maker – Laurus Labs – rose as much as 9.16 per cent to hit record high of Rs 682.95 after credit rating agency CARE Ratings upgraded its long term banking facilities. CARE Ratings upgraded Long Term Bank Facilities worth Rs 1,930.64 crore to CARE AA Stable from CARE AA-. CARE Ratings also reaffirmed its Short Term Bank Facilities worth Rs 473.20 crore at CARE A1+.
“The revision in the ratings assigned to the bank facilities of Laurus Labs Limited (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 antiretro-viral 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 while upgrading its credit ratings.
CARE Ratings also assigned CARE A1+ rating to its commercial paper worth Rs 200 crore and reaffirmed CARE A1+ rating for carved out commercial paper worth Rs 100 crore, Laurus Labs added.
“The ratings continues to derive strength from experienced promoters having long-term presence in the pharma industry, strong product portfolio with perceptible presence in ARV, Oncology and Hepatitis C therapeutic segments, reputed and geographically diversified customer base with 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,” CARE Ratings added.
As of 1:15 pm, Laurus Labs shares traded 5.43 per cent higher at Rs 660, outperforming the Sensex which was up 0.3 per cent.