Laurus Labs has set ambitious targets for Financial Year 2026, focusing on delivering strong operational growth while maintaining healthy profitability margins. The pharmaceutical company has outlined its strategic vision for sustained business expansion in the coming periods.

Growth Strategy for FY26

The company aims to achieve strong operational growth in Financial Year 2026, indicating confidence in its business model and market opportunities. This growth objective reflects Laurus Labs' strategic focus on expanding its operational capabilities and market presence in the pharmaceutical sector.

Margin Outlook and Financial Projections

Laurus Labs anticipates maintaining stable gross margins around 60% for both the upcoming quarter and the next financial year. This margin guidance demonstrates the company's commitment to operational efficiency and cost management.

Strategic Focus Areas

The company's dual focus on growth and margin stability suggests a balanced approach to business expansion. By targeting strong operational growth while maintaining consistent gross margins, Laurus Labs appears to be positioning itself for sustainable long-term performance in the competitive pharmaceutical industry.

The margin stability target of around 60% indicates the company's confidence in its pricing strategies and operational efficiency measures. This level of gross margin reflects healthy profitability metrics for the pharmaceutical sector.

Market corrections often create a paradox where some expensive stocks maintain their ground while others with seemingly reasonable valuations decline sharply. This phenomenon reflects how markets evaluate conviction and growth prospects rather than valuation metrics in isolation. Three companies currently demonstrate this dynamic, trading at elevated multiples while sustaining strong performance through strategic positioning and operational excellence.

Laurus Labs: CDMO Transformation Strategy

Laurus Labs has emerged as a standout performer in the pharmaceutical sector, with its share price reaching ₹ 1,030.00, representing a 76.00% increase from the previous year. The company operates as a research-driven pharmaceutical and biotechnology entity, maintaining leadership positions in APIs and Finished Dosage Forms across antiretrovirals, oncology, and cardiovascular therapeutic areas.

The company trades at a price-to-earnings multiple of 81.00 times, commanding a premium over competitors like Divi's Laboratories (65.00 times) and Sai Life Sciences (61.00 times). This valuation reflects the market's confidence in Laurus's aggressive expansion strategy, including a proposed $600.00 million investment over eight years for a world-class pharmaceutical manufacturing complex.

Laurus's CDMO division represents a key growth driver, transitioning from early-phase to commercial deliveries. The company expects improved growth momentum with EBITDA margins continuing to expand over the next 12.00 to 24.00 months. Management targets improving the fixed asset turnover ratio from 0.90x to 1.10x over two years, returning to historical levels through better asset utilization.

Jain Resource Recycling: Formalization Beneficiary

Jain Resource Recycling has capitalized on the recycling sector's formalization trend, delivering a 19.00% return since its October 2025 listing. Currently trading at ₹ 381.00 per share, the company commands a premium valuation of 52.00 times price-to-earnings, the highest in its sector compared to Pondy Oxides (42.00 times) and Gravita (29.00 times).

The company's H1 FY26 performance demonstrates strong operational momentum:

Jain Resource benefits from strong customer relationships, with repeat customers accounting for 88.00% of revenue in H1 FY26. The company maintains a policy of adding 20.00% additional capacity annually, with lead capacity utilization approaching 100.00%. Management projects continuing the historical growth rate of 20.00-25.00% for the existing product portfolio.

Syrma SGS Technology: Margin-Focused Transformation

Syrma SGS Technology exemplifies successful business model transformation, trading at ₹ 668.00 per share with a 43.00% return over the past year. The company maintains a price-to-earnings multiple of 56.00 times, supported by its strategic shift toward higher-margin segments.

The company's strategic rebalancing away from lower-margin consumer electronics toward industrial and automotive segments has yielded significant margin improvements. Consumer segment revenue declined 23.00% to ₹ 683.00 crore, reducing its share from 40.00% to 32.00% of total revenue. Conversely, industrial revenues grew 20.00% to ₹ 552.00 crore, while automotive increased 24.00%.

Syrma maintains strong revenue visibility with an order book of approximately ₹ 5,800.00 crore, providing 1.50 years of revenue coverage. Management has reiterated guidance for 30.00% organic revenue growth in FY26, with FY27 expected to deliver even stronger performance.

Strategic Investment Initiatives

All three companies demonstrate commitment to long-term growth through substantial capital investments. Laurus plans ₹ 1,000.00 crore capex in FY26 and ₹ 250.00 crore investment over three years in Cell and Gene Therapy capabilities. Jain Resource is establishing a ₹ 60.00 crore copper scrap recycling facility through a joint venture with US-based C&Y Group, while exploring ₹ 100.00 crore investments in tire recycling, solar panel recycling, and e-waste processing.

Syrma's most ambitious initiative involves ₹ 1,500.00 crore investment in PCB manufacturing, with trial production expected in Q3/Q4 FY27 and revenue generation beginning in FY28. Management estimates this investment could generate peak revenue of ₹ 2,500.00 crore once fully operational, based on typical PCB industry asset turnover ratios of 1.20-1.50x.

These companies illustrate how strong operational execution, strategic positioning, and growth investments can sustain premium valuations even during market corrections, as investors focus on long-term conviction rather than short-term valuation concerns.