Laurus Labs shares plunged 15 per cent on January 27 as investors locked in profits, ending the stock’s two-day winning streak. The stock had risen nearly 6% over the past two sessions, driven by the company’s stronger-than-expected Q3 results.
The sell-off was further fueled by reports that the US had ordered a halt to foreign aid, potentially suspending funding for the President’s Emergency Plan for AIDS Relief (PEPFAR) as early as Monday. This decision could impact the distribution of anti-viral medications (ARVs) to millions.
The PEPFAR program, introduced during George W. Bush’s presidency, is recognized for saving millions of lives worldwide by allocating billions in HIV funding and providing antiretroviral therapy (ARVs) to over 20 million individuals across 55 countries.
Shortly after his inauguration, President Donald Trump signed an executive order launching a 90-day review of U.S. foreign aid programs. A memo from the U.S. Agency for International Development, released on Saturday, confirmed that the suspension of foreign aid would involve a total freeze, with only a few exceptions.
Laurus Labs announced its December quarter results last week, marking a return of its EBITDA margin to the 20% level for the first time in seven quarters. The company’s management also reiterated its full-year guidance.
Should you buy or sell?
Brokerage firm Choice Broking has revised its rating to ‘hold’, with a target price of ₹639. “We anticipate Laurus to benefit from the expansion in its CDMO and Bio segments, driving growth. While the API segment continues to face sluggishness, we expect normalization post FY26. Valuing the company at 37x FY27 EPS, we arrive at a target price of INR 639 and revise our rating to ‘HOLD’,” the brokerage firm said.
Goldman Sachs has retained its “Sell” rating on Laurus Labs, setting a price target of ₹475. The brokerage noted that although the management did not offer specific revenue guidance for FY2025, they emphasized having established the groundwork for medium-term growth.
