Motilal Oswal Initiates Coverage of Laurus Labs with Buy Recommendation, Target Price Rs 1280

Motilal Oswal Research Report: Laurus Labs

Key Highlights

• Laurus Labs (LAURUS) delivered 30% YoY growth and 26% EBITDA margin in 9MFY26, outperforming its peers in the Contract Development and Manufacturing Organization (CDMO) sector.
• The company's strong growth trajectory is attributed to its prior capacity creation and elevated CDMO capital expenditures (INR39b FY22-26), which enabled faster conversion of pipeline opportunities.

Financial Performance

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• INR39b of capital expenditures are underway over FY22-26, with 78% allocated towards CDMO/API.
• The company's scaled capabilities and significant capex are expected to sustain CDMO growth, benefit from commercial supply ramp-up, and maintain leadership.

Outlook

• We expect LAURUS to end FY26 with INR8.5b PAT and a 16% CAGR over FY26-28, reaching INR11.5b.
• We value LAURUS at 62x 12M forward earnings, arriving at a target price (TP) of INR1,280.
• Recommendation: BUY.