Laurus Labs rallies 4%, up 55% in 5 months; brokerages see more upside

The stock price of Laurus Labs hit a new high of ₹1,662.45 in intra-day deals on Monday; the stock has zoomed 176% in the past 14 months from levels of ₹601.75 on May 27, 2025.

Laurus Labs share price movement

  Laurus Labs share price hit a new high of ₹1,662.45, surging 4 per cent on the BSE in Monday’s intra-day trade after the company delivered a record quarterly revenue with expanded profitability and continued its portfolio transformation.

 

In the past five months, the share price of the Contract Development and Manufacturing Organization (CDMO) company outperformed the market by soaring 55 per cent, compared to a 5.7 per cent decline in the BSE Sensex. In the past 14 months, the market price Laurus Labs zoomed 176 per cent from ₹601.75 on May 27, 2025.

 

 

What’s driving Laurus Labs stock price?

 

In the first quarter (April to June 2026) of the financial year 2026-27 (Q1FY27), Laurus delivered a strong operating performance despite challenging macroeconomic volatility. The company sees sustained momentum across both CDMO and Affordable Medicine divisions. Laurus achieved revenue of ₹2,026 crore, representing 29 per cent growth and earnings before interest, taxes, depreciation, and amortization (EBITDA) of ₹644 crore, representing 66 per cent growth. The EBITDA margins were strong and consistently improved at 31.8 per cent, supported by improvement in capacity utilization and operating leverage. Gross margins improved by over 3 percentage points to 62.7 per cent due to favourable segment mix.

 

The management said the strong performance in Q1 was driven by growing commercial deliveries within CDMO and continued strength in Affordable Medicines portfolio. The management said the company also achieved important milestones, including agreement to in-license two Antibody Drug Conjugates (ADCs) and securing final handover of new land parcel, reinforcing long-term growth strategy.

 

Laurus Labs said the business prospects will remain positive based on the increased CDMO Opportunities for Global customers, CMO opportunities for generic companies, expanded business Opportunities for Generics. The transformation of company’s portfolio is well underway, and momentum is building.  The company is making significant investments in novel technologies, scale and strengthening integrated capabilities offerings towards laying foundation for future growth, it added.

 

Brokerages see more upside in Laurus Labs?

 

The management raised its FY27 capex guidance to ₹2,000 crore (vs. the initial guidance of ₹1,500 crore), driven by incremental capacity investments to meet rising customer demand. The additional investments are earmarked for multiple human health and animal health programs, directed toward API/intermediate manufacturing capacity.

 

The commercial-scale fermentation capacity (400+ KL) and downstream processing expansion remain on track for commissioning by end-CY26, with management expecting the precision fermentation business to witness a meaningful ramp-up over the next 12-18 months as multiple customer programs are commercialized.

 

The management expects most of the non-commercial CDMO business (45 per cent of revenue), currently driven by Phase III supplies, to transition into commercial manufacturing following regulatory approvals. One product has received global regulatory approval, driving the commercial scale-up of the contract, analysts at Motilal Oswal Financial Services (MOFSL) said.

 

The brokerage firm values Laurus at 65x 12M forward earnings to arrive at a target price of ₹1,980. Laurus continues to invest in manufacturing assets backed by contracts with leading pharma customers. It is also expanding its capabilities in differentiated technologies like biologics as well as ADCs. Analysts at MOFSL expect a 24 per cent earnings compound annual growth rate (CAGR) over FY26-28 and reiterated a 'BUY' on the stock.

 

Meanwhile, analysts at ICICI Securities also maintained a 'BUY' rating with a target price of ₹1,890 based on 38 x FY28E EBITDA of ₹2764 crore. The brokerage firm said they believe the premium valuation is justifiable based on the quest for sustained capex drive and success of delivering strong numbers on a consistent basis.

 

The CDMO growth for the quarter was phenomenal due to higher contribution from late-stage clinical projects and commercial API supplies and strong recurring business from existing relationships. The CDMO quarterly run rate has gone up from ₹220-250 crore to ₹450-500 crore to now ₹800 crore in two years.

 

The management reiterated the CDMO contribution guidance in the overall revenues to reach at 50 per cent by FY30. “What we have noticed over the last 10 years is the quest for capex, devoid of temporary slowdown in the reported numbers. The benefit of the same has been getting reflected with a lag of 2-3 years,” the brokerage firm said in the result update.

 

Laurus Pharma Zone (LPZ), a 530 acres land parcel allotted by the AP government for setting up pharma manufacturing (potential investment of ₹5,630 crore in three phases over 8 years) could be the stage for the fresh leg of growth capex, analysts said.  ===================================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.