Laurus Labs falls 6% despite strong Q4 results: Here's what brokerages say

Business Standard

25-04-2025

Laurus Labs share price today: Shares of pharmaceutical and biotechnology company Laurus Labs plunged around 6 per cent to hit an intraday low of ₹606.5 per cent on Friday despite the company reporting a strong financial performance in the March 2025 quarter (Q4 FY25).
At 11:58 AM on Friday, the stock was quoting at ₹618.50, down 4.18 per cent from the previous session's closing price of ₹645.50. In comparison, the benchmark NSE Nifty50 index was trading at 23,873.55, down 373.15 points or 1.54 per cent.
Laurus Labs Q4 FY25 result update
The company reported a standalone revenue of ₹234 crore, up 208 per cent from ₹76 crore in the year-ago period. Its revenue from operations increased 19 per cent Y-o-Y to ₹1,720 crore compared to ₹1,440 crore in the year-ago period, driven by strong growth in the CDMO (Contract Development and Manufacturing Organization) segment and generic finished dosage form (FDF) partly offset by lower API business. The company reported research and development (R&D) spending of ₹66 crore, which is 3.7 per cent of revenue.
Laurus Labs stock history
The stock has fallen around 8 per cent from its 52-week high of ₹660.9 touched on September 06, 2024. The company's total market capitalisation stood at ₹33,352.77 crore. On a year-to-date basis, the stock has surged around 7 per cent compared to a 2.5 per cent increase in the Nifty50 index.
Brokerage Views on Laurus Labs: Motilal Oswal Financial Services (MOFSL)
Laurus Labs delivered a second consecutive quarter with better-than-expected financial performance, driven by strong traction in the Formulation (FDF)/API segment. Despite weak performance in the CDMO business during the March 2025 quarter, the quarterly sales run rate continued to improve, MOFSL said in a note.
"We slightly raise our FY26 and FY27 estimates by 3 per cent and 1 per cent, respectively, factoring in the scale-up from new launches in the FDF segment, and an accelerated pace of product orders in late-phase clinical trials/commercial stage and
improved operating leverage," the brokerage said.
In addition, the management expects significant traction in the animal health and crop protection business from end-FY26 onwards. The brokerage firm has maintained a 'Buy' rating on the stock, with a revised target price of ₹750.
Antique Stock Broking
According to analysts at Antique Stock Broking, Laurus Labs delivered a robust financial performance in the Q4 FY25. The quarter witnessed a remarkable 95 per cent Y-o-Y growth in the small molecules CDMO business. The CDMO business is expected to be the primary growth driver and maintain its upward trajectory into FY26E.
"We anticipate that the enhanced utilisation of the CDMO capacities will lead to positive operating leverage, potentially improving the Ebitda margin to 26 per cent in FY27E against 19 per cent in FY25. However, concerns persist for the ARV segment, which still represents 46 per cent of FY25 and 34 per cent of FY27E revenue. In a best-case scenario, this segment is expected to post flat revenue over FY25-27E," the brokerage said. However, the management did not provide specific growth guidance for the CDMO segment.
Antique Broking has maintained a 'Hold' rating with a revised target price of ₹520 from ₹398 earlier.
About Laurus Labs
Incorporated in 2005, Laurus Labs is a pharmaceutical and biotechnology company. The company develops and manufactures Active Pharma Ingredients (APIs) including intermediates and generic Finished dosage forms (FDF). It offers contract research services to cater to the needs of the global pharmaceutical industry. The company operates through three segments including Laurus Generics, Laurus Synthesis and Laurus Bio. The company sell its APIs in around 56 countries.