Jefferies has maintained its underperform rating on Laurus Labs while raising its target price to ₹700 per share following the company’s stronger-than-expected Q2FY26 performance. The brokerage said the quarter was driven by robust ARV (antiretroviral) sales, aided by shipment timing, while the CDMO business remained stable and supported by growth in animal health supplies.
Laurus Labs reported strong earnings momentum during the quarter, prompting Jefferies to revise its estimates upward. However, the brokerage flagged that the company’s announcement of a $600 million capital expenditure plan for its Vizag facility signals the beginning of a long investment phase, which could weigh on near-term free cash flows. The investment will focus on building advanced capabilities in antibody-drug conjugates (ADC) and cell and gene therapy (CGT).
Jefferies said while Laurus is building a diversified, high-value CDMO pipeline, the payoff from these investments may take time. It expects earnings to remain rangebound in the near term as capital intensity and gestation cycles play out.
Disclaimer: The views and recommendations above are those of Jefferies. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
