Laurus Labs Limited

LAURUSLABS

Sector: PharmaceuticalsSub-sector: APIs and Formulations
Qtr Score Rank 39 / 57 (Top 33 percentile)Growth Score Rank 26 / 51 (Top 51 percentile)

Quarterly Score

↔ Trend: Stable
Sentiment stable - Recent avg: 8.00, Historical avg: 8.00

Showing the latest 12 quarterly points (newest to oldest).

Score context (latest 12 quarters)

Q4 FY2025
8.0

The company provides qualitative guidance for FY26, expecting continued growth in revenues and profits, with improved operating margins due to better asset utilization and product mix. Specific quantitative guidance for growth rates or revenue targets is not provided. A significant capex of around INR 1,000 crores is planned for FY26, spread across formulation CMO, fermentation capacity (INR 250 crores), and API/CDMO expansions. No significant increase in debt is anticipated to support this capex.

Quarter summary

  • Demonstrated strong revenue growth driven by the CDMO segment, indicating successful diversification efforts.
  • Showcased improved operational leverage leading to margin expansion, supported by a favorable shift in business mix.

Rationale

  • Significant revenue growth of 10% YoY to INR 5,554 crores for FY25 and 19% YoY for Q4 FY25 to INR 1,720 crores demonstrates strong demand, particularly in the CDMO segment.
  • EBITDA margins expanded by 4 percentage points to 20% for FY25, driven by better operating leverage and a shift in revenue mix away from ARV (down from 67% to 45% in five years) towards CDMO (up from 13% to 28%).
Q1 FY2026
8.0

Management expects gross margins to remain between 55%-60%. The outlook for improved growth in the rest of the year is confident. CDMO business is expected to see good growth over last year, though it can be 'bumpy' due to clinical program dependencies. Meaningful revenues from crop sciences are expected next financial year. Non-ARV formulations capacity expansion will be qualified by end of this year, expecting growth from Q4 onwards.

Quarter summary

  • Strong revenue growth and margin expansion driven by CDMO and Generics segments.
  • Significant capacity expansion announcements in microbial fermentation, gene therapy/ADC, and finished formulations to fuel future growth.

Rationale

  • Revenue growth of 31% YoY to INR 1,570 crores, driven by strong CDMO and Generic segments, indicates healthy top-line momentum.
  • Gross margins expanded to 59% and EBITDA margins reached nearly 25%, a significant improvement of 10.5 percentage points YoY, attributed to better operating leverage and product/segment mix. Management expects gross margins to remain between 55%-60%.
Q2 FY2026
8.0

While specific quantitative guidance for the full year is not explicitly stated, management maintains confidence in improved growth for the remainder of the year. The ARV business is expected to be around INR2,500 crores +/- INR200 crores. Capex for the current year is estimated to be closer to INR1,000 crores, with a similar amount expected in H2 FY'26.

Quarter summary

  • Laurus Labs is executing on its long-term strategy of investing in advanced manufacturing capabilities and capacity expansion to meet growing customer demand, particularly in CDMO and specialized modalities.
  • The company is seeing positive results from its strategic shift towards higher-margin businesses like CDMO, evidenced by strong growth and improving EBITDA margins.

Rationale

  • Revenue growth remains strong, with H1 FY'26 total income from operations up 33% YoY to INR3,223 crores, driven by ARV business, sustained CDMO momentum, and other generic growth. Q2 FY'26 revenue was INR1,653 crores, up 35% YoY.
  • EBITDA margins are showing a healthy upward trend, reaching 26% in Q2 FY'26 (up from 11 percentage points YoY, though this specific delta appears to refer to a prior quarter's performance based on context) and 25.4% for H1 FY'26. Gross margins are maintained above 59%, nearing 60%, attributed to better product and segment mix and process improvements.
Q3 FY2026Latest
8.0

Management expects to maintain gross margins around 60% for the coming quarters and the next financial year. They anticipate Q4 FY'26 to be better than Q4 FY'25 for the CDMO segment. While not providing specific quantitative guidance for FY'27 CDMO revenue, they expect healthy growth, with the majority of revenues driven by commercial supplies. Management is confident that ROCE percentage will go up from the current 18.5%, but is not committing to reaching 25% within the next 12 months.

Quarter summary

  • Strategic investments in advanced technology platforms (peptides, ADC, gene therapy) are progressing, with key facilities becoming operational, positioning the company for future growth.
  • The company is deliberately choosing not to enter large-scale MAB manufacturing and sterile manufacturing, focusing management bandwidth on existing growth areas.

Rationale

  • Strong revenue growth of 26% YoY in Q3 FY'26 to Rs. 1,778 crores, and 30% YoY for the 9-month period to Rs. 5,001 crores, driven by broad-based performance across Generics and CDMO segments.
  • Healthy margin expansion with Gross Margins maintained around 60% (60.9% in Q3 FY'26) and EBITDA margins reaching 27% (Rs. 485 crore in Q3 FY'26) due to improved product mix and operational leverage.

Future Growth Prospects

Growth score: 8.5Visibility: 80%Updated: 27 Feb 2026, 09:07 am

Catalysts (next 12-24 months)

Total triggers: 5Visible per view: 1 / 2 / 3Slides: 5

Swipe or use arrows to browse all triggers.

capacity2026Impact: revenue

Peptide commercial manufacturing qualification

Timeline

  • in progressFY26 · concall:Q3FY26

    CDMO investment in peptide commercial manufacturing facilities, we expect qualification during this calendar year

Supporting evidence

• FY26 · concall:Q3FY26 · When it comes to CDMO investment in peptide commercial manufacturing facilities, we expect qualification during this calendar year

capex2026 endImpact: revenue, roceQty: 25 US$ mn

Gene/ADC cGMP facility completion & commissioning

Timeline

  • announcedQ2 FY26 · ppt:Q2FY26

    Invested in ADC technology platform company Aarvik Therapeutics during 2Q to advance integrated ADC services

  • in progress2026 end · ppt:Q2FY26

    Construction initiated for Gene/Antibody drug conjugates cGMP facility - expected to be completed by 2026 end as planned

Show full timeline (3)
  • in progressnext 12 months · concall:Q3FY26

    GMP facilities will come in the next 12 months

Supporting evidence

• 2026 end · ppt:Q2FY26 · Construction initiated for Gene/Antibody drug conjugates cGMP facility - expected to be completed by 2026 end as planned

Show evidence (2)

• next 12-24 months · concall:Q3FY26 · GMP facilities will come in the next 12 months and we don't expect any meaningful revenues coming from ADCs in the next two years.

capacitymid-2027Impact: revenueQty: 3 billion units

KRKA Pharma JV Phase-1 operations

Timeline

  • announcedJune 2025 · ppt:Q2FY26

    Ground breaking of Finished formulation manufacturing site in Hyderabad in June 2025

  • commissionedmid-2027 · concall:Q3FY26

    Phase-1 is expected to be completed by mid of 2027.

Supporting evidence

• mid-2027 · concall:Q3FY26 · in the Phase-1, we are creating 3 billion solid oral capacity and 100 million solid oral capacity for potent molecules... Phase-1 we expect to complete by mid of 2027.

Show evidence (2)

• FY27 · concall:Q3FY26 · We will have revenues in the next financial, not in this financial year.

capacityend of 2026Impact: revenue, roceQty: 400 kiloliters

Bio division commercial-scale fermentation facility operationalization

Timeline

  • announcedJune 2025 · ppt:Q2FY26

    Ground broken in June 2025 and Capacity proposed in Phase 1

  • in progress2026 end · concall:Q3FY26

    Phase-1 capacity of a little over 400 kiloliters to be operational towards the end of 2026.

Supporting evidence

• 2026 end · concall:Q3FY26 · Construction work for the commercial-scale fermentation facility at Vizag is progressing in line with the plan and we expect a Phase-1 capacity of a little over 400 kiloliters to be operational towards the end of 2026.

Show evidence (2)

• 2026 end · concall:Q3FY26 · our revenues will stagnate until we operationalize our new capacity which will be by end of this calendar year

capacityQ4 FY26 onwardsImpact: revenue

Non-ARV FDF capacity expansion and new launches

Timeline

  • scaledQ4 FY26 · concall:Q2FY26

    non-ARV formulations should grow from Q4 onwards.

  • scaledQ1 FY27 · concall:Q3FY26

    We have already started using the additional capacity and we will see a little bit of increase or jump from next financial year Q1.

Supporting evidence

• Q4 FY26 · concall:Q2FY26 · We are expanding our capacity for non-ARV formulations and which will be qualified by end of this year. So we can expect non-ARV formulations should grow from Q4 onwards.

Show evidence (2)

• next 12-18 months · concall:Q3FY26 · We expect to sustain those because of additional capacities coming up for our CMO partner in Europe and also volume gain in US and also some new launches in North America both the US and Canada.

Variant perception

Non-consensus view
Consensus

The market may be overestimating the short-term revenue contribution from new modalities like ADC and gene therapy, and potentially underestimating the continued lumpiness of CDMO revenues.

Upside
  • Majority of FY27 CDMO revenues expected from commercial supplies, signaling a shift beyond development phases. (concall:Q3FY26, p10)
Show more (1)
  • ROCE is projected to improve from 18.5%, driven by better asset utilization, not just top-line growth. (concall:Q3FY26, p8)
Downside
  • Management expects 'no meaningful revenues' from ADCs/gene therapy in the next two years. (concall:Q3FY26, p9)
Show more (1)
  • Bio division revenues are expected to 'stagnate' until new capacity is operational by end of 2026. (concall:Q3FY26, p7)
base case70% conf

Quick takeaway

Continued healthy operational growth for FY26 driven by CDMO & Generics.

Risk watch: Lumpiness in CDMO deliveries could affect quarterly results.

Show details (2 drivers, 2 risks)

Drivers

  • Continued healthy operational growth for FY26 driven by CDMO & Generics.
  • Gross margins maintained around 60%, EBITDA margins at 27% due to operational leverage.

Risks

  • Lumpiness in CDMO deliveries could affect quarterly results.
  • New modality project delays in generating meaningful revenues.
upside case80% conf

Quick takeaway

Major CDMO revenues in FY27 from commercial supplies and strong pipeline traction.

Risk watch: Slower-than-expected commercial traction for new products/capacities.

Show details (2 drivers, 2 risks)

Drivers

  • Major CDMO revenues in FY27 from commercial supplies and strong pipeline traction.
  • Successful ramp-up and commercialization of new capacities in peptides, KRKA JV, and Bio by mid-2027.

Risks

  • Slower-than-expected commercial traction for new products/capacities.
  • Increased competitive pressures in specific generic markets.
downside case40% conf

Quick takeaway

Unfavorable product mix shifts towards lower-margin segments.

Risk watch: No meaningful revenues from ADC/gene therapy in next 2 years as guided.

Show details (2 drivers, 2 risks)

Drivers

  • Unfavorable product mix shifts towards lower-margin segments.
  • Significant delays in new facility commissioning or regulatory approvals.

Risks

  • No meaningful revenues from ADC/gene therapy in next 2 years as guided.
  • Sustained pricing pressure in ARV and non-ARV generics.

Story of the Stock - Top Strategies

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