StockEdge predicts rerating chance for Laurus Labs after 43% gains in stocks in one month
By S JHA
MUMBAI, July 28, 2025 — Laurus Labs has rallied nearly 43% in the last three months and a remarkable 99.5% over the past year, massively outperforming both the Nifty Pharma and Nifty 50 indices. According to a note shared on StockEdge’s Telegram channel, the surge may only be the beginning of a larger long-term rerating story powered by aggressive expansion and booming CDMO business.
StockEdge said that Laurus Labs posted impressive numbers for Q1 FY26:
- Revenue: ₹1,570 Cr (↑31.4% YoY)
- Net Profit: ₹161 Cr (↑1219% YoY)
- EBITDA Margin: ₹382 Cr (+1050 bps YoY)
- ROCE: Improved from 9.7% to 12.7%
CDMO: The Next Big Growth Engine
The Contract Development and Manufacturing Organisation (CDMO) segment clocked ~₹493 Cr in revenue, marking a 130% YoY jump, led by strong interest from big pharma and late-stage projects. StockEdge analysts see this as the single biggest growth lever for Laurus, with CDMO expected to contribute up to 50% of total revenue in the coming years.
Business Mix Shifts: Decline in API, Surge in FDFs
While the API business saw a 4% YoY decline—largely due to weak anti-retroviral (ARV) sales—the generic Finished Dosage Formulations (FDF) segment surged 50% YoY. “ARV-related API and formulations still contributed around ₹640 Cr, showing there’s gas left in the tank despite the headwinds,” added StockEdge in its note.
Massive ₹5,000 Cr Capex Plan in Play
Laurus has lined up an aggressive ₹5,000 crore capital expenditure over the next five years, which includes:
- A microbial fermentation facility in Vizag
- Investments in gene therapy and antibody drug manufacturing
- A new JV with KRKA for an FDF plant in Hyderabad
Stock Momentum Strong Across Time Frames
Laurus Labs’ stock has shown extraordinary performance:
- 1-month: +27.6%
- 3-month: +43%
- 6-month: +75.4%
- 1-year: +99.5%
The Laurus Labs stocks are trading at 94 PE multiple while the face value of the shares is ₹2. Momentum scores are also bullish:
- 1M: 78/100
- 3M: 77/100
- 6M: 85/100
Risks to Monitor
Despite the bullish outlook, StockEdge flags a few headwinds:
- High Capex burden may lead to rising debt (currently at ₹2,388 Cr)
- Ongoing API de-growth
- Potential execution challenges in the biologics segment
With strong visibility in CDMO orders, a futuristic manufacturing pipeline, and a shifting product mix toward high-margin segments, Laurus Labs is being closely watched by investors for a possible rerating, said analysts at StockEdge.
(Disclaimer: This article makes no recommendation for buy or sell of shares of any company)
Follow The Raisina Hills on WhatsApp, Instagram, YouTube, Facebook, and LinkedIn
