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Informist, Wednesday, Jul. 22, 2026

By Gunjan Rajput

 

NEW DELHI – Laurus Labs Ltd. is expected to report a sharp rise in net profit for the June quarter, driven by healthy growth in its contract development and manufacturing services business. Continued strength in formulations and active pharmaceutical ingredients, along with a favourable product mix, is expected to support margins despite cost pressures.

The drugmaker is expected to report a net profit in the range of INR 2.12 billion-INR 2.82 billion, according to estimates from three brokerages. The highest estimate is by Kotak Securities Ltd. and the lowest by HDFC Securities Ltd. Laurus Labs had posted net profit of INR 1.63 billion a year earlier and INR 2.92 billion a quarter earlier.

Revenue for the June quarter is expected in the range of INR 17.77 billion-INR 18.81 billion. Kotak Securities has the highest estimate, while Motilal Oswal Financial Services Pvt. Ltd. has the lowest. The pharma company had reported revenue of INR 15.70 billion a year ago and INR 18.12 billion a quarter ago.

The company's small-molecule contract development and manufacturing services business is expected to remain the primary growth driver, supported by commercial supplies and maturing capacities, according to HDFC Securities.

The Hyderabad-based company's generic API business and finished dosage form business are expected to post a 13-16% year-on-year growth in the June quarter, supported by demand across both Anti-Retroviral and non-Anti-Retroviral products, according to brokerages. The pharma company's formulations business is also expected to grow 17% year-on-year, according to Kotak Securities.
 

The company is expected to report earnings before interest, taxes, depreciation, and amortisation of INR 4.67 billion-INR 5.25 billion. The highest estimate is by Kotak Securities and the lowest by HDFC Securities.

HDFC Securities expects EBITDA margin to expand by 145 basis points on year, while Kotak Securities expects a 360-bps expansion. Motilal Oswal, however, expects EBITDA margin to contract by 90 bps because of higher operating expenses. The company had reported an EBITDA margin of 24.8% in the year-ago quarter.

"Better business mix to improve gross margins (rise in input costs to pass on); this will offset the higher costs to drive EBITDA margin expansion," as mentioned in the report by HDFC.

Investors will watch the management's comments on the pace of contract development and manufacturing services scale-up, manufacturing capacity utilisation, new contract wins, demand trends across formulations and APIs, and the outlook for margins over the coming quarters.

Laurus Labs is scheduled to report its June quarter earnings Friday. At 1253 IST, shares of the company traded at INR 1,580.40 on the National Stock Exchange, down 0.8%. The shares have risen nearly 44% since the company reported its March quarter results.

 

Of the six brokerage reports on the company available with Informist, three have a 'buy' recommendation on the stock with an average target price of INR 1,168. This is over 26% lower than the current market price. Two brokerages have a 'hold' recommendation on the stock with an average target price of INR 1,002. One has a sell call with a share price target of INR 1,130.

 

The following are the June quarter earnings estimates for Laurus Labs from three brokerages in descending order of the estimate of net profit in INR billion:

 

Brokerage name	Net Sales	Net Profit	EBITDA
Kotak Securities Ltd	18.81	2.82	5.25
Motilal Oswal Financial Services Ltd.	17.77	2.40	4.89
HDFC Securities Ltd	18.11	2.12	4.67
Average	18.23	2.45	4.93

 

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Himanshi Gupta

 

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