Laurus Labs Share Price Drop 15% Due to Foreign Aid Pause News

Laurus Labs share price dropped 15% on Monday, January 27, reversing all gains made during Friday’s trading session, following the company’s December quarter results.

Impact of US Foreign Aid Pause

The decline in the stock comes after reports that the US government ordered a pause in foreign aid, which could stop funding for the President’s Emergency Plan for AIDS Relief (PEPFAR) starting Monday. This could disrupt the supply of anti-viral medications (ARVs) to millions of people globally.

PEPFAR’s Role in Global Health

The PEPFAR program, initiated under President George W. Bush, has saved millions of lives worldwide by funding organisations to fight HIV and providing ARVs to over 20 million people across 55 countries.

US Foreign Aid Review and Its Effects

Following President Donald Trump’s executive order last week, a 90-day review of US foreign aid programs was triggered. A memo from the US Agency for International Development (USAID) on Saturday stated that the foreign aid pause would mean a complete halt with limited exceptions.

Laurus Labs Q3 FY25 Results

Laurus Labs reported a solid performance in Q3, with its EBITDA margin improving by 500 basis points to 20.2%, the highest since Q4 of FY23. This improvement is attributed to better asset utilisation and productivity gains.

The company’s net profit surged to ₹92 crore, up from ₹23 crore in the same quarter last year. Other income also increased slightly, reaching ₹9.4 crore from ₹2.4 crore last year.

Revenue for the quarter grew by 18.5% year-on-year, totalling ₹1,415 crore, compared to ₹1,194 crore in Q3 of FY24. On a sequential basis, revenue rose by 16%.

EBITDA for the quarter saw a significant increase of 58%, reaching ₹285.8 crore. Laurus Labs expects further improvement in EBITDA margins as it ramps up growth projects and new assets come online, despite pricing pressures in the generic portfolio.

About Laurus Labs

Laurus Labs, established in 2005, is a research-focused pharmaceutical and biotechnology company. It holds a leading position globally in the production of select Active Pharmaceutical Ingredients (APIs), such as anti-retroviral, oncology drugs (including High Potent APIs), and cardiovascular and gastrointestinal treatments. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.