Laurus Labs Shares Hit Record High Amid Strong Q2 Earnings Outlook

Laurus Labs' stock price climbed to a fresh peak of ₹2,137 during intraday trading on Tuesday, marking a 4 percent rise on the Bombay Stock Exchange (BSE). This advance came despite a broadly subdued market, fueled by investor anticipation of robust earnings results. Over the last two trading sessions, shares of the pharmaceutical company surged approximately 8 percent.

By 2:32 PM, Laurus Labs shares were trading up 3.6 percent at ₹2,133.15, while the benchmark BSE Sensex index was down 0.44 percent. Trading activity at the stock level also intensified, with the average daily volume jumping 1.5 times. Combined transactions on the National Stock Exchange (NSE) and BSE saw 3.65 million shares change hands during the session.

Foreign portfolio investors (FPIs) have shown a growing appetite for Laurus Labs, increasing their stake for the second consecutive quarter. Data reveals FPIs raised their shareholding to 30.8 percent in the September quarter of fiscal year 2027 (Q2 FY27), up from 28 percent at the end of the June quarter. This trend follows a steady buildup from 25.8 percent recorded in the March quarter (Q4 FY26).

Conversely, domestic institutional investors (DIIs) reduced their ownership to 11.9 percent in Q2 FY27, down from 13.7 percent in the previous quarter and 14 percent in Q4 FY26. Public shareholding, excluding FPIs and DIIs, also declined for the fourth quarter in a row, dropping to 29.9 percent in Q2 FY27 from 30.8 percent in Q1 FY27. This category held 34.5 percent at the end of September 2025.

Laurus Labs is positioned as a research-driven pharmaceutical and biotechnology firm undergoing a significant capital expenditure phase. The company has already invested ₹4,300 crore into expanding its operations, with an additional ₹3,000 crore in ongoing capital projects.

According to analysts at Nuvama Institutional Equities, the company’s Contract Development and Manufacturing Organisation (CDMO) segment is expected to see revenues multiply 3.4 times, reaching ₹7,160 crore by fiscal year 2029 (FY29E). CDMO revenue is projected to account for over half of total sales by FY29E, substantially improving the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margin to nearly 35 percent.

The brokerage firm highlighted Laurus Labs’ closely guarded peptide manufacturing facility, which is anticipated to commence operations soon. This facility could contribute between ₹1,000 crore and ₹1,600 crore in revenue, with an estimated margin of 35 percent. Nuvama initiated coverage on Laurus Labs in October 2026 with a Buy rating and a price target of ₹2,520 per share.

Return on equity (RoE) is forecasted to improve to 23.3 percent by FY29E, up from 16 percent in FY26. The improvement is mainly driven by margin expansion, indicating a sustainable increase. As the capital expenditure cycle peaks, free cash flow is expected to strengthen significantly after FY27E.

This momentum in Laurus Labs’ stock and fundamentals reflects broader trends in the pharmaceutical sector, where companies are investing heavily in research, development, and manufacturing capabilities to meet rising demand for specialized drugs and contract services. The firm’s strategic focus on CDMO and peptide manufacturing aligns with industry shifts toward outsourcing and biopharmaceutical innovation.

Disclaimer: The views and forecasts in this report are those of the cited brokerage and analysts. They do not represent the opinions of Business Standard. Readers should use their own judgment when considering investment decisions.