Hyderabad-based Laurus Labs Ltd. announced a significant financial upturn for the second quarter of fiscal year 2027, with its consolidated net profit surging by 126% year-on-year (YoY) to Rs 441 crore. This compares to Rs 195 crore recorded in the same quarter of the previous fiscal year. The positive results were met with investor enthusiasm, as Laurus Labs shares closed 2.75% higher at Rs 2,245 on Thursday.
Robust Revenue and Margin Expansion
The pharmaceutical company's revenue for Q2 FY27 also saw substantial growth, increasing by 33% YoY to Rs 2,206 crore. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose by 78% YoY, reaching Rs 762 crore from Rs 429 crore in the prior year's quarter. This strong performance led to a notable expansion in the EBITDA margin, which grew by 850 basis points to 34.5% from 26%.
Gross margin improved by 310 basis points YoY, reaching 63%, primarily attributed to a more favorable business mix. Sequentially, net profit also saw a 20% increase from Rs 368 crore reported in Q1 FY27.
CDMO Business Drives Growth
A key driver of Laurus Labs' strong Q2 performance was its Contract Development and Manufacturing Organisation (CDMO) business, which generated Rs 904 crore in revenue, marking a 75% YoY increase from Rs 518 crore. Within the CDMO segment, revenue from small-molecule CDMO products surged by 86% to Rs 875 crore. However, the biological segment experienced a 38% decline, contributing Rs 29 crore.
The affordable medicines division also contributed positively, reporting revenue of Rs 1,302 crore, up 15% YoY. This division saw finished dosage forms (FDF) revenue grow by 31% to Rs 677 crore, while active pharmaceutical ingredient (API) revenue increased marginally by 1% to Rs 625 crore.
First-Half Performance and Future Investments
For the first half of FY27, Laurus Labs reported total revenue of Rs 4,233 crore, a 31% increase YoY. EBITDA for this period rose by 72% to Rs 1,406 crore, with margins expanding to 33.2% from 25.4% in the first half of FY26. Net profit for H1 FY27 more than doubled, climbing 126% to Rs 809 crore, compared to Rs 358 crore in the corresponding period of the previous fiscal year.
The company's capital expenditure for H1 FY27 stood at Rs 864 crore, representing 20% of its revenue. Looking ahead, Laurus Labs announced plans to invest over Rs 3,000 crore across its manufacturing network and capability expansion during FY27 and FY28, signaling a commitment to continued growth and development.