Highlights

• Motilal Oswal Securities Ltd. has issued a buy rating with a target price of ₹1,110 and Dam Capital Advisors has set a target price of ₹1,083.
• Q2 FY26 revenue of LAURUSLABS surged 35%, supported by growth across business segments.
• EBITDA more than doubled, with margins expanding sharply to 26%.

Laurus Labs Ltd. (BSE:540222, NSE:LAURUSLABS), a research-driven pharmaceutical and biotechnology company, has received ‘Buy’ ratings from two brokerage houses.

Motilal Oswal Securities Ltd. has issued a buy rating with a target price of ₹1,110 and Dam Capital Advisors has set a target price of ₹1,083.

Financial Performance in Q2 FY26

For the second quarter of FY26 (Q2 FY26), Laurus Labs reported revenues of ₹1,653 crore, marking a 35% year-on-year growth from ₹1,224 crore in Q2 FY25. This top-line performance was driven by sustained demand in Contract Development and Manufacturing (CDMO) programs and Generics growth.

The company’s EBITDA surged 136% year-on-year to ₹429 crore, with margins expanding significantly to 26.0% from 14.9% a year earlier. This improvement was attributed to better operational efficiency and an enhanced business mix.

Gross margins improved by 4.7 percentage points to 59.9%, highlighting cost optimization and improved product realisations.

Profitability Surges with Margin Expansion

Laurus Labs delivered a remarkable turnaround in profitability, with Profit Before Tax (PBT) rising over tenfold to ₹270 crore, compared to ₹23 crore in the same period last year. Net profit increased 875% year-on-year, reaching ₹195 crore, while Earnings Per Share (EPS) climbed to ₹3.6 from ₹0.4.

For the first half of FY26, the company achieved revenues of ₹3,223 crore, up 33% year-on-year, and an EBITDA of ₹818 crore, reflecting a 132% increase. The EBITDA margin expanded to 25.4%, driven by efficient execution and favourable business dynamics.

V V Ravi Kumar, Executive Director & Chief Financial Officer commented;

“Our strong Q2 performance was in line with expectations. We are pleased to report that fundamentals of our business remain strong, with sustained growth momentum in CDMO and Generic business. We have achieved revenues of ₹ 1,653 Cr, representing 35% growth and EBITDA of ₹ 429 Cr, representing 136% growth. The EBITDA margins continue to remain very healthy at 26.0%, supported by continuing operating leverage. Overall, we reported strong H1 performance. We achieved ₹ 3,223 Cr in revenues, representing 33% growth and EBITDA of ₹ 818 Cr, representing 132% growth, resulting in 25.4% EBITDA margins marking over 10% pts improvement over last year. Gross margins improved by over 4.5% pts to 59.6% due to favorable CDMO mix and operational improvements. Net Debt leverage has decreased significantly over last year to 1.3x EBITDA despite continuing CAPEX investments.”

Investment and Growth Outlook

Laurus Labs continues to invest in manufacturing capacity expansion and capability enhancement, allocating approximately 15% of sales towards CAPEX to sustain growth momentum. The company also declared an interim dividend of ₹0.80 per share.