Laurus Labs Limited Q3 FY26 Earnings Call Summary

Summary

Laurus Labs Limited - Q3 FY 2026 Earnings Call Summary Friday, January 23, 2026, 4:00 PM IST

Event Participants

Executives 5 Dr. Satyanarayana Chava (Founder & CEO), Mr. Krishna Chaitanya Chava (Executive Director, Head CDMO), Mr. V. V. Ravi Kumar (Executive Director & CFO), Mrs. Soumya Chava (Executive Director, Generics), Mr. Vivek Kumar (AVP, Investor Relations)

Analysts 13 Abhijit K., Anjan Banerjee, Aseem, Bansal, Bharath Siripurapu, Chirag Shah, Dheeraj Kumar Reddy, Jeevan, Manavu Mehta, Mehul Panjwani, Nitin Agarwal, Rehan Syed, Tushar Manudhane

Financials & KPIs

Geographic & Segment Commentary

• Generics (API & FDF): Revenue grew 37% YoY to ₹1,327 crores, led by stability in the ARV segment and new launches in North America. Management increased the ARV annual guidance to ₹2,600 crores (+/- ₹200 crores) due to expanded API capacity and higher market share.
• CDMO (Synthesis): Reported ₹408 crores in sales; while quarterly growth was flat YoY due to timing, 9M growth exceeded 50%. Focus remains on large-scale NCE supplies, with three commercial NCEs supplied in the last 18 months and additional commercial molecules slated for Q4.
• Bio Division: Currently capacity-constrained with ₹43 crores in revenue. A new fermentation facility (400 KL Phase-1) is under construction in Vizag and is expected to be operational by the end of calendar year 2026.

Company-Specific & Strategic Commentary

• Advanced Modalities: Operationalized ADC and Gene Therapy process development labs in Hyderabad; $25 million allocated for a GMP facility expected in 12 months.
• Peptide Integration: Investing in a fully integrated peptide platform including amino acids, fragments, and purification; qualification is expected during the current calendar year.
• Krka Joint Venture: Increased investment to support a new FDA-compliant facility in Hyderabad (Phase-1: 3 billion tablets) targeting European markets; expected completion by mid-2027.
• Strategic Exclusions: Management explicitly decided against entering large-scale Monoclonal Antibody (MAB) manufacturing or sterile manufacturing to preserve management bandwidth and capital.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

CDMO Performance & Lumpiness

• Question: Why did CDMO revenue decline sequentially despite talk of late-stage deliveries? (Rehan Syed)
• Answer: CDMO cannot be tracked QoQ; some commercial supplies occur only once or twice a year. 9M growth is 50%+ and Q4 FY26 is expected to exceed Q4 FY25 (Dr. Satyanarayana Chava).

CAPEX & New Modalities

• Question: What is the investment plan for peptides and ADCs? (Tushar Manudhane)
• Answer: ADC GMP facility has a $25 million allocation; peptides will see qualification this calendar year. Overall, annual CAPEX will stay around ₹1,000 crores for the next year (Dr. Satyanarayana Chava).

ARV Business Sustainability

• Question: Has something changed in ARV to justify the current high run rate? (Nitin Agarwal)
• Answer: We expanded API capacity and improved processes/RM costs. We are now guiding for ₹2,600 crores annually as the business is more stable and we are gaining market share (V. V. Ravi Kumar).

Asset Turnover & ROCE

• Question: Will the ₹5,000 crore Vizag complex risk a multi-year deleveraging? (Rehan Syed)
• Answer: Current asset turn is 0.91x; we target 1.1x. While we won’t hit 25% ROCE in 12 months, we are confident the trend is upward from 18.5% (V. V. Ravi Kumar).

Key Takeaway

Laurus Labs delivered a strong Q3 FY26 with 26% revenue growth and significant margin expansion, as EBITDA margins reached 27.3%. The performance was bolstered by a resurgent Generics division, where ARV volumes and new developed market launches drove a 37% YoY increase. While the CDMO segment showed quarterly lumpiness, its 9M growth remains robust at over 50%, with a clear strategic shift toward commercial-stage NCE supplies. The company is aggressively investing ~₹1,000 crores annually into high-growth “ahead of the curve” platforms including peptides, ADCs, and a large-scale fermentation facility, while maintaining a healthy net debt-to-EBITDA of 1.2x. Management’s decision to bypass MABs and steriles underscores a disciplined focus on small-molecule complexity and integrated biotechnology. Despite near-term capacity constraints in the Bio segment, the ramp-up of new generic capacities and the transition of CDMO projects to commercial scale provide a strong trajectory for FY27.