Laurus Labs Shares Drop 3% Despite 2nd Straight Quarterly Beat; Here're Target Prices

Laurus Labs shares tanked 3 per cent successful Friday's trade, contempt a beardown group of March 4th results, led by beardown traction successful nan Formulation segment. This was nan 2nd consecutive 4th of better-than-expected capacity for Laurus Labs, which has seen 3 years of deteriorated earnings. A fewer banal analysts are still concerned complete nan bequest issues pinch anti-retroviral (ARV) segment. 

The banal fell 3.22 per cent to Rs 626.25 connected BSE. Jefferies maintained its 'Underperform' connected Laurus pinch a target of Rs 480, saying nan guidance did not connection immoderate actual income guidance for FY26. 

Laurus ended FY25 connected a beardown note, pinch 92 per cent YoY maturation successful PAT. But MOFSL noted that nan agelong manufacturing lead times for CDMO projects and higher capex strength not only impacted net but besides affected wide return ratios complete nan past 2 years. 

"With improving plus utilisation driven by task execution successful nan CDMO conception and caller launches successful nan FDF segment, we expect 18 per cent, 25 per cent/57 per cent CAGR successful sales/Ebitda /PAT complete FY25-27. Reiterate BUY connected nan stock," it said.

Antique Stock Broking said Laurus' CDMO business will beryllium nan superior maturation driver, pinch nan conception expected to support its upward trajectory into FY26. Overall, it anticipated that nan enhanced utilisation of nan CDMO capacities will lead to affirmative operating leverage, perchance improving nan Ebitda separator to 26 per cent successful FY27 from 19 per cent successful FY25.

"However, concerns persist for nan ARV segment, which still represents 46 per cent of FY25 and 34 per cent of estimated FY27 revenue. In a best-case scenario, this conception is expected to station level gross complete FY25-27E. We proceed pinch HOLD standing pinch a revised target of Rs 520 (previously Rs 398), valuing nan institution astatine 30 times PE connected FY27 earnings," Antique said.

The target accommodation reflects Laurus' expanding publication from higher maturation and higher separator CDMO business conception compared to nan bequest ARV segment, nan brokerage said.

Arihant Capital Market said non-ARV formulations should prime up from Q3FY26 arsenic caller approvals footwear in. Animal wellness CDMO will commencement contributing meaningfully by FY26-end, while harvest sciences gains standard from FY27, it said. This brokerage noted that nan institution has lined up a capex of Rs 1,000 crore,  mostly successful CDMO and formulations, but nan indebtedness apt to enactment nether control.
 

Published on: Apr 25, 2025 9:31 AM IST