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Informist, Saturday, Oct. 17, 2026

 

By Narayana Krishna

 

HYDERABAD - Laurus Labs Ltd. is expected to report healthy year-on-year earnings growth for the September quarter, driven by robust growth in its custom synthesis business, according to analysts tracking the company. Improved commercial supplies in the contract development and manufacturing organisation division and traction in the formulations business are expected to help the company report better numbers.

 

Laurus Labs is expected to report a consolidated net profit of INR 3.7 billion for Jul-Sept, up over 88% on year but flat on quarter, according to the average of estimates from five brokerages. Increased raw material and freight charges will impact sequential performance, according to analysts. The highest estimate for net profit is INR 4 billion from 360 ONE Capital Market Pvt. Ltd. and the lowest is INR 3.2 billion from Motilal Oswal Financial Services Ltd.

 

The company's revenues for the quarter are seen up 27% on year and 4% on quarter at INR 21.1 billion, the estimates show. The highest estimate for revenues is INR 21.6 billion from Kotak Securities Ltd. and the lowest is INR 20.6 billion from Choice Equity Broking Pvt. Ltd.

GROWTH BOOSTER

Laurus Labs' custom synthesis business, led by its small-molecule contract development and manufacturing division, is expected to drive revenue growth in the September quarter, supported by commercial supplies and the ramp-up of manufacturing capacities. Kotak Securities projected the synthesis revenue to grow 86% on year to INR 8.8 billion, up 5% sequentially. Choice Equity expects the synthesis business to sustain robust growth momentum going forward.

 

Laurus Labs' generic active pharmaceutical ingredients business is expected to grow at a moderate pace, supported by continued traction in non-antiretroviral APIs, according to analysts. Kotak Securities projects overall API sales to grow 11% on year, driven by 7% growth in non-antiretroviral API sales and 19% growth in non- non-antiretroviral APIs.

 

Choice Equity expects continued traction in formulations to support performance for the quarter.

Laurus Biologics Ltd., the company's biologics arm, is expected to grow 25% on year, according to HDFC Securities Ltd. Choice Equity also expects the biologics segment to sustain robust growth, alongside the synthesis business, but did not provide a specific growth estimate.

 

MARGINS

Laurus Labs' earnings before interest, tax, depreciation, and amortisation for the September quarter are expected to grow strongly on year, supported by revenue growth, an improved business mix, and operating leverage, according to analysts. Kotak Securities projects the EBITDA to rise 67% on year to INR 6.8 billion, up 6% sequentially.

 

The EBITDA estimates from three brokerages range from INR 6.15 billion to INR 6.8 billion. The EBITDA margin estimates range from 29.1% to 32.8%. Motilal Oswal projects a margin of 29.1%, while 360 ONE Capital Market Pvt. Ltd. estimates 32.8%, compared with 24.4% a year ago.

 

Kotak Securities expects the company's Jul-Sept gross margin to improve 240 basis points on year to 62.3%, although it projected a 40 bps sequential decline. HDFC Securities cited an improved business mix and steady costs as factors supporting margin expansion, while Choice Equity expects a better product mix and scalability from new capacities to support margins going forward.

 

Laurus Labs is scheduled to announce its September-quarter earnings on Oct. 29. Analysts will track commentary on the contract development and manufacturing business order book status, along with the quantum of opportunities in the segment moving from the non-commercial stage to commercial-scale production. Friday, shares of the company ended at INR 2,060.10 apiece on the National Stock Exchange, up 2% from Thursday. The stock is up nearly 30% since the announcement of its June quarter earnings on Jul 24.

 

Of the seven research reports on the company available with Informist, four have a "buy" or equivalent recommendation on the stock with an average target price of INR 1,861, while two have a "hold" rating. One has a "sell" recommendation with a price target of INR 1,580.

 

Following are the earnings estimates for Laurus Labs for the September quarter from five brokerages in descending order of the net profit estimate, in INR billion:

 

Brokerages	Net Sales	Net Profit	EBITDA
360 ONE Capital Market Pvt. Ltd.	21.07	4.03	--
Kotak Securities Ltd.	21.62	3.88	6.75
Choice Equity Broking Pvt. Ltd.	20.58	3.77	--
HDFC Securities Ltd.	20.86	3.48	6.26
Motilal Oswal Financial Services Ltd.	21.14	3.20	6.15
Average	21.06	3.67	6.39

 

End

 

Edited by Biswadip Mitra

 

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