Laurus Labs Share Price Soars as B&K Initiates Coverage with 18% Upside Potential

Laurus Labs Ltd. share price extended gains as B&K Securities initiated coverage and projected an 18% upside potential for the stock price. The pharma company is set to begin a strong growth cycle as its main earning-driving segment margin expands.

Contract Development and Manufacturing Organisation Drives Growth

Contract development and manufacturing organisation — the key growth driving segment of Laurus Labs — delivered a Rs 1,370 crore revenue in financial year 2025, which marks a 49% year-on-year increase. Over 110 active programs, increasing late-stage conversion, and strategic diversification into animal health and crop sciences have supported this growth, B&K Securities said in a report.

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Laurus Labs to Sustain 40% CAGR in Revenue

Laurus Labs will likely sustain 40% compound annual growth rate in revenue from small molecule CDMO over FY25-FY28, according to B&K.

The company has directed the majority of the Rs 4,000-crore or $450-million capital expenditure towards CDMO capabilities over the last five years. These capabilities include biocatalysis, fermentation, and high-potent chemistry with further Rs 2,000 crore or $232 million earmarked for the next two years.

Learn more about CDMO capabilities and their impact on the pharmaceutical industry.

Ebitda Margins to Expand, Driving Net Profit Growth

As the sales mix shift toward the high-value segment, Ebitda margins are projected to expand from 19% in FY25 to 28% in FY28, driving a 51% CAGR in net profit over the same period.

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Laurus Labs Shares Advance, Outperforming NSE Nifty 50 Index

Laurus Labs shares were 0.48% higher at Rs 925 apiece as of 1:58 p.m., compared to 0.19% advance in the NSE Nifty 50 index.

The stock advanced 98.83% in 12 months, and 53.48% on year-to-date basis. The relative strength index was at 65.90.

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Analyst Ratings and Price Target

Out of 17 analysts tracking the company, eight maintain a ‘buy’ rating, three recommend a ‘hold’ and six suggest ‘sell’, according to Bloomberg data. The average 12-month consensus price target implies a downside of 11.6%.

Learn more about analyst ratings and price target and their impact on stock prices.