Motilal Oswal Sees Laurus Labs Reaching Rs 1370

Laurus Labs Delivers Strong Q4FY26 Results, Raises Earnings Estimates

Laurus Labs has reported in-line revenue for the fourth quarter of fiscal year 2026 (4QFY26). The company's improved operating leverage has led to a 7% beat on earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter. Additionally, a lower-than-expected tax rate resulted in a 19% beat on profit after tax (PAT) for the quarter.

The company's strong year-over-year (YoY) growth in contract development and manufacturing organization (CDMO) revenue continues, with a growth rate of 49% in fiscal year 2025 (FY25) and 38% in FY26. Laurus Labs' focus on development project/commercialized molecules has contributed to its growth momentum. The company is also investing in active pharmaceutical ingredient (API) and fermentation capacity to sustain its growth.

Outlook and Earnings Estimates

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Based on the company's performance, Motilal Oswal's research team has raised earnings estimates for Laurus Labs by 8% for fiscal year 2027 (FY27) and 6% for FY28. The revised estimates take into account higher traction in CDMO contracts, steady growth momentum in non-anti-retroviral (Non-ARV) and anti-retroviral (ARV) segments, and continued operating leverage.

Valuation and Target Price

Motilal Oswal values Laurus Labs at 62 times its 12-month forward earnings, resulting in a target price of INR1,370.

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