Buy Laurus Labs; target of Rs 720: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Laurus Labs

Laurus Lab (LAURUS) significantly beat our earnings estimates in 3QFY25, led by a scale-up in the CDMO segment. Commercial supplies (including launch quantities) led to strong 89% YoY growth in CDMO sales for the quarter. Apart from chemical synthesis-based CDMO, LAURUS is enhancing its capacities/capabilities in bio-based CDMO activities through a JV with Eight Roads (investment of INR1.6b to start with).

Outlook

We raise our earnings estimates by 4%/3%/3% for FY25/FY26/FY27 to factor in a) improved visibility for execution of CDMO contracts, b) a gradual uptick in ARV formulation sales, and c) better operating leverage. We value LAURUS at 40x 12M forward earnings to arrive at a TP of INR720.

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