Laurus Labs soars 8% in 2 days, nears record high; analysts see more upside

The management expects better Q4 and a decent overall growth in FY27

Shares of contract development and manufacturing major Laurus Labs extended their upmove, gaining nearly 3 per cent to hit an intraday high of ₹1,103.35 on the BSE on Thursday. Over the past two trading sessions, the pharmaceutical company’s stock has rallied 8 per cent. Quoting close to its all-time high of ₹1,140.9, the stock ended the session at ₹1,092, up 1.52 per cent.

 

Over the past six months, Laurus shares have outperformed the market, rising 26 per cent compared with a 2 per cent gain in the Sensex. Over the past year, the stock has surged 101.5 per cent, against a 10.2 per cent rise in the benchmark index.

 

 

Laurus delivered a strong operational and financial performance in the third quarter (October–December/Q3) of 2025-26 (FY26). Revenue for Q3FY26 grew 26 per cent to ₹1,778 crore, while gross margins expanded sequentially to around 60 per cent. Operating profit margins, meanwhile, expanded to a little over 27 per cent.

 

Management credited the performance to strong growth across its generics business, as well as clinical and commercial supplies under its contract development and manufacturing organisation (CDMO) programmes.

 

Despite an apparent slowdown in the CDMO business, margin performance remained robust, driven by strong growth in generics on the back of higher antiretroviral (ARV) volumes and strong offtake of select molecules in developed markets.

 

Management expects a stronger fourth quarter (January–March) and decent overall growth in 2026-27. Analysts at ICICI Securities expect CDMO contribution to rise from 16 per cent to 32 per cent by 2027-28. Of the ₹3,900 crore capital expenditure (capex) incurred between 2021-22 (FY22) and FY26, nearly 75 per cent has been earmarked for active pharmaceutical ingredients (APIs) and CDMO.

 

The company is now beginning to see the benefits of this investment, with the CDMO quarterly run rate rising from ₹220–250 crore to ₹450–500 crore over the past two years. “Besides CDMO, Laurus is also investing in new-edge technologies such as cell and gene therapies. The generics business (both APIs and formulations) is also expected to improve, supported by capacity expansion and traction from commercial ARVs, alongside contract manufacturing expansion from European customers,” ICICI Securities said.

 

Overall, with incremental capacity utilisation and improved execution in CDMO, the brokerage expects strong momentum to persist, albeit with quarterly gyrations.

 

On technical charts, Laurus is showing renewed bullish momentum after reclaiming the ₹1,050 resistance zone, backed by a strong bullish candle and rising volumes, indicating fresh accumulation, Kunal Kamble, technical analyst at Bonanza Portfolio, said.

 

The stock is trading above its short- and medium-term exponential moving averages (EMAs), while the 200-EMA remains positively sloped, confirming alignment with the broader uptrend. The price has formed a higher low near ₹980 and is now attempting a breakout towards the recent swing high around ₹1,100. The relative strength index has moved above 60, reflecting improving momentum without entering overbought territory. Kamble has recommended a ‘buy’ on Laurus with a target price of ₹1,227 and a stop loss at ₹998.

 

Meanwhile, analysts at Motilal Oswal Financial Services said Laurus has delivered stronger execution relative to peers, with 30 per cent year-on-year growth and a 26 per cent operating profit margin over the first nine months of FY26. This performance was supported by a scale-up in the CDMO and formulation segments.

 

The company’s growth trajectory reflects prior capacity creation and elevated CDMO capex of ₹3,900 crore over FY22–26, enabling faster conversion of pipeline opportunities compared with peers. “With significant capex underway and scaled capabilities, the company appears well positioned to sustain CDMO growth, benefit from the commercial supply ramp-up, and maintain leadership through the next phase of the CDMO cycle,” the brokerage said, reiterating a ‘buy’ rating with a target price of ₹1,280 per share.