Laurus Labs Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹2,060.10+₹41.60 (+2.06%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Laurus Labs Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Laurus Labs Limited, together with its subsidiaries, manufactures and sells medicines and active pharmaceutical ingredients (APIs) in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees7,059

Annual revenue₹6,721 Cr

How does it make money?

Turns over ₹6,721 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹27 left at the operating level before interest, tax and depreciation. Each of its 7,059 employees supports ₹95.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹95.2 lakh

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, CIPLA LTD, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 19.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE14.5%

What is the outlook?

15 analysts covering the stock expect revenue to grow about 15.8% and earnings to grow about 18.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+15.8%

Est. earnings growth+18.1%

Analysts15

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +12% while net margin moved +1% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+12%

Margin effect+1%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 3.8% — barely ahead of inflation
✗ Profit CAGR of only 4.0%

Quality vs. Valuation

Company Quality

67/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

39/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

101.8x

3Y Median

149.5x

40 monthly readings · mean 131.9x · range 24.7x–294.4x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 32% below its 3y median of 149.5x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 205% above the peer median of 33.3x.

vs. its own history

Cheap

149.5x median over 40 months · -32%

vs. sector peers

Expensive

33.3x median of 4 peers · +205%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

62.1x

PEG

25.45

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 14701% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 23.6% to 19.5% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 watch

🟡Receivables growing faster than salesFinancial
Receivables up 36% against revenue up 12% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 39% against revenue up 12% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.5% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Priced below its own history
The stock trades 32% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹554 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 36% against revenue up 12%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 205% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 3.8% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 25%✓ 27.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 3.8% CAGR
Latest reported year was 29.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹554 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 17%✓ 19.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✗ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

8 good · 1 neutral · 2 weak

Market Cap

₹1.11 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

101.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

20.98x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹20.23

Profitable

Profitable on a per-share basis

ROE

16.8%

Strong

Strong capital efficiency

ROCE

19.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.46x

Low

Conservative leverage

Revenue Growth (YoY)

29.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

125.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.12%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹554 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

68.7x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

25.4%

Good

Healthy core-business profitability

Net Margin

15.0%

Good

Strong bottom-line conversion

Current Ratio

1.33

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.34

Defensive

Steadier than the market

52W Range Position

98%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

2017.6 / 1930.1

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

57.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹6,014 Cr	₹5,002 Cr	₹5,508 Cr	₹6,721 Cr	+3.8%
EBITDA	₹1,556 Cr	₹778 Cr	₹1,064 Cr	₹1,830 Cr	+5.6%
EBITDA Margin	25.9%	15.5%	19.3%	27.2%	—
PAT (Net Profit)	₹790 Cr	₹161 Cr	₹358 Cr	₹889 Cr	+4.0%
EPS	₹14.64	₹2.97	₹6.64	₹16.45	+4.0%
ROE	19.6%	3.9%	8.0%	16.8%	—
ROCE	23.6%	7.7%	11.9%	19.5%	—
Total Debt	₹2,015 Cr	₹2,577 Cr	₹2,764 Cr	₹2,518 Cr	+7.7%
Free Cash Flow	₹4 Cr	-₹13 Cr	-₹39 Cr	₹554 Cr	+429.0%

🟢 Revenue has grown at 3.8% a year over 3 years.

🟢 EBITDA has grown at 5.6% a year over 3 years.

🟢 EBITDA Margin has risen from 25.9% to 27.2% over 3 years (+1.4 pts).

🟢 PAT (Net Profit) has grown at 4.0% a year over 3 years.

🟢 EPS has grown at 4.0% a year over 3 years.

🔴 ROE has fallen from 19.6% to 16.8% over 3 years (-2.8 pts).

🔴 ROCE has fallen from 23.6% to 19.5% over 3 years (-4.0 pts).

🔴 Total Debt has grown at 7.7% a year over 3 years.

🟢 Free Cash Flow has grown at 429.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹10,511 Cr

Total Liabilities

₹5,080 Cr

Cash & Equivalents

₹113 Cr

Operating Cash Flow

₹1,624 Cr

Capex

-₹1,070 Cr

Shareholding (proxy)

Institutional Holding

33.2%

Insider Holding

32.0%

Corporate Actions

Next Earnings

29 Oct 2026

Dividend Rate

₹2.4

Ex-Dividend Date

08 May 2026

Analyst Consensus

Recommendations

8 Buy · 3 Hold · 4 Sell

Target Price (Mean)

₹1,703.07

-17.3% vs CMP

Target Range

₹900 – ₹2,520

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
CIPLA LTD	31.8x	9.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

2 mixed4 general

Laurus Labs (NSEI:LAURUSLABS) Stock Gets Fair Value Bump As Analysts Rework Outlook

Yahoo Finance, 15 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Laurus Labs Ltd. (LAURUSLABS) 52 Week High Streak: Sixth Session Near Peak

Univest, 14 Oct

LAURUSLABS Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Laurus Labs shifts gears as CDMO emerges as key growth driver; Nuvama sees 24% upside

The Economic Times, 16 Oct

Laurus Labs rallies 4%, up 55% in 5 months; brokerages see more upside

Business Standard, 27 Jul

Laurus Labs invests ₹1,078 crore in Krka Pharma, retains 49% stake

scanx.trade, 14 Oct

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability

MiddlingRisk

WeakGrowth · Valuation

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you.

1 of 5 tripwires tripped — Revenue growth stays above 4% a year · see Key things to watch ↑