Laurus up for 9th straight day, soars 23% in 1 month. What's driving stock?

Business Standard

3 days ago

Laurus Labs share price: Shares of Laurus Labs continued at their northward movement, hitting a new high of ₹754.15, gaining 1 per cent on the BSE in Wednesday's intra-day trade in otherwise a weak market. The BSE Sensex was down 0.2 per cent at 83,534 at 11:02 AM.
The stock of the pharmaceutical company is quoting higher for the ninth straight trading day, surging 17 per cent from level of Rs 645.85 on June 19, 2025. In the past one month, Laurus has outperformed the market and rallied 23 per cent, as compared to 2.7 per cent rise in the BSE Sensex. It has zoomed 93 per cent from its 52-week low of ₹390.30 on August 8, 2024.
Laurus Labs FY25 performance, outlook
After 3 years of muted earnings, Laurus Labs reported a healthy performance in FY25 with profit more than doubling. Improving asset utilisation driven by project execution in the contract development and manufacturing organisation (CDMO) Operations segment and new launches in the FDF (Finished Dosage Forms), Laurus is expected to report a steady growth in future.
Laurus is well-positioned to continue evolving as a diversified CDMO and CMO leader, underpinned by a strong pipeline, enabling technologies, and commercial excellence. The management anticipates operating margins will improve further, supported by continued enhancements in utilization rates and product mix optimisation.
Looking ahead, Laurus, in its FY25 annual report, said the company is committed to scaling its global CDMO footprint through continuous capacity expansion and technology investments while advancing into high-value specialty service capabilities such as biologics and gene therapy.
Additionally, the company is leveraging automation and AI-driven process optimisation to enhance efficiency and compliance. With a strong foundation and a robust pipeline, the management said the company is well-positioned to capture growth opportunities and reinforce its position as a trusted global CDMO partner. ALSO READ |
CARE Ratings revised outlook to stable from negative
Revision in the outlook of the long-term rating for bank facilities of Laurus reflects the company's improved performance in FY25, marked by growth in total operating income (TOI), uptick in profitability margins, and strengthening debt coverage indicators.
The stable outlook remains supported by anticipated scale-up of the CDMO segment in FY26, which is expected to contribute meaningfully to revenue growth and margin expansion, aided by better capacity utilisation and operational execution.
Laurus has 11 manufacturing sites, of which, nine are in Vizag and two in Bangalore. This apart, the company has two Research and Development (R&D) facilities. The company's six manufacturing facilities are approved by the USFDA. Some sites are also approved by other regulatory authorities such as ANVISA Brazil, and WHO Geneva among others. The company has eight manufacturing units for APIs, one for FDF, seven inclusive units for CDMO, and two for bio-ingredients.
CareEdge Ratings expects that with improved execution and a higher anticipated contribution from the CDMO segment, the company's margins will expand further by ~150-200 basis points in the coming years. This margin improvement is likely to be supported by enhanced operating leverage, increased focus on value added offerings, and more efficient capacity utilisation within the CDMO business.
Going forward, the ratings agency expects that the company's capital structure is expected to strengthen further, supported by improved operational performance and enhanced cash flow generation.
Considering cash accruals generated by the company in the recent past and estimated accruals, it is expected that the company would be able to meet its debt obligations comfortably after meeting its capex and increased working capital requirements, CareEdge Ratings said in its rationale dated July 1, 2025.