Laurus Labs Limited has released the transcript for its Q4 FY26 earnings conference call, hosted on April 30, 2026, in compliance with Regulation 30 and 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The communication was signed by G. Venkateswar Reddy, Company Secretary & Compliance Officer. The call was moderated by Ms. Payal Shah of DAM Capital Advisors and featured key management including Dr. Satyanarayana Chava (Founder & CEO), Mr. V. V. Ravi Kumar (ED & CFO), Mr. Krishna Chaitanya Chava (ED, Head CDMO), and Ms. Soumya Chava (ED, Generics and Commercial).

Financial Performance Overview

Laurus Labs delivered robust operational and financial performance for FY26. Total income from operations reached INR6,813 crores, reflecting a 23% growth over the previous year. Profit after tax surged 148% to INR889 crores. EBITDA margins expanded by 6.7 percentage points to 26.8%, supported by healthy gross margins at approximately 60%. For Q4 specifically, revenues stood at INR1,812 crores with 5% growth, EBITDA was INR523 crores at a margin of 28.9%, and net profit was INR279 crores. ROCE improved significantly to 17.7% from 9.7% in the prior year.

Management attributed gross margin improvement to raw material price softening and process improvements. The CFO noted that net debt stood at INR2,285 crores with a debt-to-EBITDA ratio of 1.25x, improved from 2.3x in the prior year.

Business Segment Performance

The CDMO business was the primary growth driver, clocking revenues of INR2,080 crores for the full year. Small molecule CDMO recorded sales of INR1,896 crores, reflecting approximately 38% growth, driven by late-stage pipeline programs, commercial NCE API supplies, and ramp-up of growth projects. Q4 small molecule CDMO sales stood at approximately INR524 crores. The Laurus Bio division reported Q4 sales of approximately INR65 crores, up approximately 124% year-on-year, while full-year sales grew approximately 15%.

The Affordable Medicines division (formerly Generics) delivered INR4,733 crores in full-year revenue, reflecting 18% growth, driven by higher volumes across ARV and oncology portfolios and strong traction from recent launches in developed markets. Q4 revenue from this division stood at INR1,223 crores. Oral solid formulation capacity was increased by 20% in FY26 to 12 billion units. On the regulatory front, the company has filed a cumulative 92 DMFs to date, with 7 dossiers filed and 6 approvals received in FY26, taking cumulative product filings to 94.

Management noted that ARV revenues for FY26 were approximately INR2,800 crores, with two-thirds from API and one-third from formulations. The ARV share of total revenue has declined from 67% six years ago to 41% in FY26, while CDMO's share has grown from 13% to over 30% over the same period.

Strategic Expansion and Capex

Laurus Labs invested INR1,070 crores in capex for the full year, with over 75% directed towards expanding CDMO and CMO capabilities and the remainder towards common infrastructure. For Q4 alone, capex investment was approximately INR335 crores. Management has increased capex guidance to approximately INR3,000 crores over the next two years, up from the earlier guidance of INR1,000 crores annually, with 90% of project spend directed towards mid- and large-scale manufacturing.

Key expansion initiatives include a greenfield manufacturing project (Unit 7) with a combined reactor volume of over 2,000 cubic meters, with first commercial validation expected by March 2027 and four additional manufacturing lines in FY28. A commercial-scale peptide manufacturing block is targeted for validation during Q2 FY27. A fermentation greenfield site for Laurus Bio (Phase 1, 400,000 liters) is expected to be operational by end of 2026. Additional capacity is being added at Unit 10 for Animal Health, and a formulation facility under the KRKA joint venture in Hyderabad is expected to complete Phase 1 by mid-2027. The company's total reactor volume for small molecule API and intermediate manufacturing has exceeded 8,200 cubic meters in FY26.

Management Commentary and Outlook

Dr. Satyanarayana Chava expressed confidence in maintaining or improving EBITDA margins in FY27, driven by better product mix and operating leverage. He noted that CDMO revenues are expected to reach 50% of overall sales by 2030, while ARV revenues are expected to remain broadly constant in absolute terms at around INR2,800 crores but decline as a percentage of total revenue. Management indicated that the CDMO pipeline is robust, with multiple late-stage programs underway, and that concentration risk is limited given diversification across programs and partners.

On the macroeconomic front, management acknowledged some solvent price pressure in Q4 FY26 due to geopolitical disruptions but stated no supply disruptions were anticipated through at least end of June. The effective tax rate is expected to be approximately 25% to 26%. Gross debt may increase slightly in FY27, but the debt-to-EBITDA ratio is expected to remain at similar or softer levels. R&D spending for FY26 was 4.1% of sales, up 10% year-on-year, with a similar percentage expected going forward. The company underwent approximately 132 quality audits in FY26 and passed all inspections without critical findings.

Laurus Labs witnessed significant institutional activity on the National Stock Exchange (NSE), with two separate block trades executed on the same day. The combined value of these transactions stood at ₹191.05 crores, underscoring considerable market interest in the stock.

Block Trade Details

The following table summarises the key parameters of both block trades executed on the NSE:

The first transaction involved approximately 1,018,729 shares changing hands at ₹1162.10 per share, amounting to a total trade value of ₹118.39 crores. The second block trade saw approximately 623,449 shares transacted at ₹1165.50 per share, totalling ₹72.66 crores.

Block trades of this magnitude are typically executed by institutional investors or large market participants, and are carried out outside the regular order book to minimise market impact. The execution of two such transactions in Laurus Labs within the same trading session reflects strong and sustained institutional interest in the stock.