Pharma major Laurus Labs has generated investor wealth of more than Rs 40,000 crore in nearly a year, emerging as a multibagger with gains of 120% from its 52-week low. The company’s market capitalisation climbed to Rs 71,763 crore on the NSE from Rs 31,555 crore on May 22, 2025 - the day the stock touched its one-year low of Rs 584.50. Despite the sharp rally, analysts believe the stock could still offer further upside, though they advise investors to maintain strict stop losses given the steep run-up.
The Hyderabad-based pharmaceuticals and biotechnology company hit a fresh 52-week high of Rs 1,333.50 on Monday, extending its super run on the D-Street. Its shares are trading above their 50-day and 200-day simple moving averages (SMAs) of Rs 1,096 and Rs 993, respectively according to Trendlyne data.
Commenting on stock's performance, Dr. Ravi Singh, Chief Research Officer at Master Capital Services said the pharma stock has emerged as one of the standout performers in the sector over the past year, delivering strong returns and creating significant wealth for investors. "What makes this move interesting is that the rally has been driven more by business improvement than just market excitement. Better margins, stronger earnings performance, and healthy growth in segments like APIs and contract manufacturing have helped improve sentiment around the company," he said. The company had faced a difficult period earlier, but the last few quarters have clearly indicated signs of recovery, he added.
Considered as defensives, pharma stocks have lived-up to their reputation. The Nifty Pharma index is up 15% over the past one year when the headline Nifty index has slipped 6% due to tariff related fears, expensive valuation, foreign outflows and war.
Laurus' nearest rival is Glen Pharmaceuticals which is up 62% in the same period. Shares of Gland Pharma, Torrent Pharmaceuticals, JB Chemicals, Biocon, Aurobindo Pharma, Ajanta Pharma, IPCA Laboratories and Wockhardt have been other market outperformers with returns between 18% and 47%.
What's working?
Dr. Singh said the company's profitability has started improving and its operations appear more stable, gradually cementing investor confidence. Moreover, this shift has also attracted stronger institutional participation, which has played a key role in the stock’s re-rating, he added.
Laurus Labs reported a consolidated net profit of Rs 279 crore in the March-ended quarter versus Rs 234 crore in the year ago period, implying a 19% uptick. The company's revenue from operations in Q4FY26 stood at Rs 1,812 crore compared to Rs 1,720 crore in the corresponding quarter of the last financial year, rising by 5%.
The net profit for FY26 stood at Rs 889 crore, which increased 148% from Rs 358 crore in FY25. Revenues in FY26 stood at Rs 6,813 crore, which increased 23% driven by continued strong growth across both CDMO and Affordable Medicine (Generics) divisions.
Also read: Laurus Labs Q4 Results: Cons PAT increased 19% to Rs 279 crore, revenue rises 5%
Meanwhile, institutional participation has risen with mutual funds increasing their holdings for the past four quarters. It stood at 11.2% at the end of March 2026 quarter from 6.9% in March 2025, up 430 bps.
What should investors do?
"From a technical standpoint, the trend continues to remain positive. However, after such a strong rally, existing investors can stay invested with a trailing stop loss at Rs 1,150 level, while fresh investors may consider waiting for better entry opportunities near Rs 1,200 – 1,250 instead of chasing prices at higher levels," Singh said.
Echoing a similar sentiment, market expert Anuj Gupta said technical charts are looking positive and investors can expect a further rise in the prices. It has strong support at Rs 1,150 and resistance at Rs 1,400.
Mehul Sheth of HDFC Securities called the Q4 performance "strong" with Earnings Before, Interest, Taxes, Depreciation and Amortisation (EBITDA) rising 25% YoY and margins expanding 452 basis points to 29%, driven largely by robust growth in the CDMO business and higher gross margins.
The brokerage said Laurus expects the CDMO momentum to continue in FY27, supported by expansion in late-stage NCE projects with large pharma clients, traction in patented APIs and upcoming fermentation capacity additions by the end of CY26.
For HDFC Securities, valuations remain a top concern as it recommended a 'Reduce' rating with a target price of Rs 1,130, which the stock has breached decisively.
At a trailing-twelve-month P/E of 80, the stock is trading at a premium over its peers like Lupin (17.88), Zydus Lifesciences (19.88), Aurobindo Pharma (24.67) and Biocon (72.80)
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
