Laurus Labs Q1 FY26: CDMO Dreams, API Screams, and a P/E That Needs Counseling

Laurus Labs Q1 FY26: CDMO Dreams, API Screams, and a P/E That Needs Counseling

1. At a Glance

Laurus Labs is back with a bang: ₹1,570 Cr in revenue (up 31% YoY) and ₹389 Cr in EBITDA (up 127%). But don’t pop the champagne just yet — the stock still trades at a P/E of 89. That’s not a multiple, that’s a cry for help.


2. Introduction with Hook

Imagine a chemistry nerd hitting the gym, bulking up on steroids (pharma ones), and suddenly becoming a contract manufacturing bodybuilder. That’s Laurus Labs for you. From generic APIs to CDMO glory, this stock is doing a pharma backflip in mid-air.

Two stats to make your eyebrows do the worm:

  • 127% YoY EBITDA growth in Q1 FY26
  • ₹5,929 Cr TTM revenue (despite ARV segment shrinkage)

3. Business Model – WTF Do They Even Do?

Basically, Laurus makes boring yet essential chemicals that keep global pharma ticking — APIs for anti-retrovirals, oncology, and other alphabet-soup diseases. But here’s the twist: they’ve gone all-in on CDMO, aka the SaaS of the pharma world — recurring, scalable, and much fancier sounding.

Their business segments:

  • Generic APIs (46% of revs) – falling, but stable
  • CDMO/CMO – the new obsession
  • Formulations – steady but not sexy
  • Synthesis & Biotech – slow cookers with long-term upside

In short: Pharma meets startup meets manufacturing sweatshop.


4. Financials Overview – ₹ Cr

MetricQ1 FY25Q1 FY26YoY Change
Revenue1,1951,570+31%
EBITDA171389+127%
Net Profit13162+1,145%
OPM14%24%+1000 bps

Margins tighter than an API plant’s gown protocol are now flexing like they’re on a muscle gain cycle.


5. Valuation – What’s This Worth?

Let’s play valuation gymnastics:

  • P/E Method: ₹507 Cr TTM PAT × 25x = ₹12,675 Cr → FV = ₹235 per share
  • EV/EBITDA Method: ₹1,266 Cr TTM EBITDA × 18x = ₹22,788 Cr EV → Net Debt ~₹2,000 Cr → Eq. Value = ₹20,788 Cr → FV = ₹386/share

Fair Value Range: ₹235–₹386
But wait, it trades at ₹838.
So unless you also order Vada Pav for ₹120 at Mumbai airport, you might want to breathe.


6. What’s Cooking – News, Triggers, Drama

  • CDMO scale-up: Capacity ramp in biologics & synthesis
  • EUR 5M JV investment with KRKA: Eastern Europe = cheap skilled labor + supply chain hedge
  • New manufacturing facilities: Because who doesn’t like more CapEx in an industry built on inspection horror stories?
  • Order book visibility: Strong for synthesis, weak for ARVs
  • FPI/DII buying: Everyone’s in, even your dentist

More plot twists than an Ekta Kapoor biopic on molecules.


7. Balance Sheet – Not Titanic, But Not Titanic-Proof

ItemMar 2025 (₹ Cr)
Equity108
Reserves4,365
Borrowings2,764
Total Liabilities9,336
Fixed Assets4,123
CWIP458
Other Assets4,521

Debt up, but manageable. Asset-heavy business. They love CapEx like pharma bros love patents.


8. Cash Flow – Sab Number Game Hai

YearCFOCFICFFNet
FY23994-997-27-30
FY24666-82225093
FY25602-68039-39

Cash flow looks like your UPI balance after payday. Comes in, goes out, leaves behind hope and depreciation.


9. Ratios – Sexy or Stressy?

RatioFY25
ROCE9%
ROE7.45%
P/E89.3x
PAT Margin8.5%
D/E~0.63

ROCE is flirting with mediocrity. P/E is dating delusion. Not sexy. Not stressy. Just… statistically confused.


10. P&L Breakdown – Show Me the Money

YearRevenueEBITDAPAT
FY236,0411,592793
FY245,041779162
FY255,5541,055358

Q1 FY26 says “comeback” but FY24 was a pharmaceutical hangover.


11. Peer Comparison – Wedding of Midcaps

CompanyRev (TTM ₹ Cr)PATP/EROCE
Sun Pharma52,57811,45436x20%
Divi’s9,3602,19080x20%
Laurus5,92950789x9%
Zydus23,2414,64421x24%

Looks like the guy wearing a tux at a Goa beach party — trying too hard with a P/E of 89 while peers chill at 20–30x.


12. Miscellaneous – Shareholding, Promoters, Drama

CategoryJun 2025
Promoters27.60%
FIIs25.70%
DIIs11.94%
Public34.78%

Promoter holding is low-ish. FIIs and DIIs keep swiping right. Public shareholding dropping like attention spans.

Management: Dr. Satyanarayana Chava — founder, scientist, and CapEx connoisseur. A man who treats molecules like startup founders treat buzzwords.


13. EduInvesting Verdict™

Laurus is flexing its CDMO muscle, but the API biceps are cramping.
Q1 FY26 was strong — no doubt — but at 89x earnings, the stock is priced like it already cured cancer, solved climate change, and fixed airport Wi-Fi.

A solid molecule mix. But maybe don’t inhale the valuation fumes too deeply.


Written by EduInvesting Team | 25 July 2025
Tags: Laurus Labs, Pharma Stocks, CDMO, API, Earnings Analysis, EduInvesting Premium

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