Laurus Labs

Laurus Labs delivered robust quarterly results with revenues of INR 1,570 crores, marking 31% year-on-year growth. The CDMO business showed strong performance with sales of INR 493 crores, driven by mid-to-late stage NCE deliveries and increased Big Pharma projects. The company maintains over 110 active CDMO projects across Human Health, Animal Health, and Crop Sciences. Gross margins expanded to 59%, while EBITDA margins improved by 10.5 percentage points to approximately 25%. The Generics division grew 12% to INR 1,048 crores, supported by volume expansion in ARV and developed market sales. Laurus Bio reported flat sales of INR 29 crores due to customer-specific scale-up challenges. The company announced three major capacity expansions including microbial fermentation facility at Vizag, gene therapy and ADC facility at Shameerpet, and formulation facility under Krka joint venture. Management expects CDMO contribution to potentially reach 50% of revenue in the medium term, up from current 30%. The company invested INR 265 crores in capex and maintains net debt of INR 2,388 crores with debt-to-EBITDA ratio of 1.8.

Laurus Labs expects gross margins to remain in the 55-60% range for the financial year ending in March, driven by higher contribution from non-antiretroviral products and growing CDMO business. The company is targeting 25% EBITDA margins for the year, up from 20% last year. CEO Satyanarayana Chava expects CDMO revenue contribution to exceed 30% this year, with the business targeting ₹2,000 crore in CDMO revenue annually. The company supplied three new chemical entities for commercial supply in the last two quarters. Laurus Labs sees minimal impact from the US biotech funding slowdown as most revenue comes from big pharma companies with strong pipelines rather than small biotech firms. The majority of CDMO revenues are from late-phase or commercial stage molecules rather than early-stage development.

Laurus Labs has outlined its financial expectations, targeting gross margins to remain between 55-60%. The company plans to maintain net debt at no more than 50% of annual revenue and keep its debt/EBITDA ratio at 2-2.5x. Laurus Labs expects ARV revenue of approximately Rs 2,500 crore with a margin of Rs 200 crore. The pharmaceutical company anticipates its CDMO (Contract Development and Manufacturing Organization) contribution to increase from the current 30% to around 50% of total revenue in the medium term.