Laurus Labs sees profit booking even as Q2 results beat brokerage estimates, falls 3%: Should you buy, sell or hold?

Laurus Labs share price

The shares of Laurus Labs dropped more than 3 percent in morning trade on October 24. This comes after the company released its results for the July-September quarter of the financial year 2026.

Earlier during the day, the stock had risen around 1 percent to Rs 943 per share, nearing all-time high level of Rs 944 per share. However, the stock then sharply dropped to trade more than 3.4 percent lower at Rs 902.35 apiece, possibly as investors may have resorted to profit booking.

The company on October 23 reported a net profit of Rs 195 crore for the second quarter of the ongoing FY26. This marked a whopping 875 percent year-on-year (YoY) increase from the Rs 19.84 crore net profit reported in the corresponding quarter of the previous financial year.

The firm’s revenue from operations meanwhile grew 35 percent YoY to Rs 1,653.47 crore in Q2 FY26, from Rs 1,223.70 crore in Q2 FY25. EBITDA jumped 136 percent YoY to Rs 429 crore, lifting margins to 26 percent from 14.9 percent a year earlier.

Contract Development and Manufacturing Organization (CDMO) revenues rose 53 percent YoY to Rs 518 crore in Q2, led by late-phase and commercial deliveries in small molecules. Generics contributed Rs 1,135 crore, up 28 percent YoY, supported by higher ARV volumes and developed market supplies.

International brokerage Jefferies kept an 'Underperform' call on the stock, but raised its target price to Rs 700 per share. This implies a downside potential of more than 25 percent from the stock's previous closing price. It noted that the Q2 results beat estimates.

Goldman Sachs maintained its 'Sell' call on the stock, with a target price of Rs 775 per share. This implies a downside potential of more than 17 percent from the stock's previous closing price. The brokerage said that the strong Q2 sales and EBITDA have beaten its estimates. It noted that the management targets 1.1x asset returns in 24 months.

DAM Capital kept a 'Buy' call on the stock, with a target price of Rs 1,083 per share. This implies an upside potential of nearly 16 percent from the stock's previous closing price. The brokerage noted that Laurus Labs reported strong Q2 results.

Motilal Oswal maintained a 'Buy' rating on the stock, with a target price of Rs 1,110 per share. This implies an upside potential of nearly 19 percent from the stock’s previous closing price. "We raise our earnings estimates by 11%/10%/6% for FY26/FY27/FY28, factoring in 1) improved ARV prospects, 2) steady pick-up in CDMO projects, and 3) higher generics business backed by CMO opportunities," it added.

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