What Laurus Labs’ FY25 Numbers Tell Us About Its Future

Laurus Labs Q4 FY25 Results: Focus Shifts to CDMO and New Growth Areas

Laurus Labs is changing fast. In FY25, the company made big moves to shift away from its older business in antiretroviral (ARV) drugs. It is now focused on growing its CDMO (Contract Development and Manufacturing Organization) business and expanding in new health areas.

Let’s break it down into simple points.

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Business Model Is Changing

Laurus Labs is moving from being mostly an ARV company to a diversified CDMO-CMO player. To make things simple, it now talks about two main business lines:

• CDMO: This includes work in both small and large molecules.
• Generics: This includes the company’s traditional business in generic drugs, including ARVs.

This new structure helps them track performance better and focus on high-growth areas.

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CDMO: The Main Growth Engine

Small Molecule CDMO

This part of the business is seeing strong growth.

• In Q4 FY25, sales reached ₹461 crore.
• For the full year, this division grew 49%.
• Laurus Labs is working on 110+ active projects, most in human health.
• Around 15+ projects are already commercial.
• Technologies used include biocatalysis, flow chemistry, and continuous manufacturing.
• The company doubled its customer base in one year, especially from large pharmaceutical firms.
• Laurus also increased API reactor capacity by 15% in 2025 to meet rising demand.

Large Molecule CDMO (Biotech Division)

This is a newer and smaller part of the CDMO business.

• In Q4, revenue was ₹29 crore, lower due to shipping delays and stopping low-margin products.
• Laurus Labs plans to build a new fermentation plant in Vizag by June 2025, investing around ₹250 crore.

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Generics Business Update

The generics segment, especially ARV formulations, has been stable but is not growing much now.

• Q4 generics sales: ₹1,230 crore.
• The formulation division grew 25% quarter-on-quarter and 12% year-on-year.
• ARV drugs now make up 45% of the business, down from 67% five years ago.
• Non-ARV products are expected to grow from Q3 FY26 onward.
• A new JV with Krka is in progress. The land is ready, and construction for a GMP facility begins by June 2025.

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Focus on New Therapies: Cell and Gene Therapy, ADCs

Laurus Labs is now exploring advanced therapies like cell and gene therapy and ADCs (antibody-drug conjugates).

ImmunoACT (Associate Company)

• Their treatment, NexCAR19, has helped around 300 patients.
• The target is to treat 2,500 people per year by September 2025.

ADCs and Gene Therapy Plans

• New leadership has joined to build these areas.
• A $15 million facility is planned for producing plasmids, viral vectors, and ADCs.
• Current revenue from ADCs is small but expected to grow due to strong demand.

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Financial Performance: Strong Q4 and Full-Year Growth

FY25 Highlights

Metric	FY25	YoY Change
Total Revenue	₹5,554 crore	+10%
Q4 Revenue	₹1,720 crore	+19%
Gross Margin	~55%	Stable
EBITDA Margin	20.1%	+4 points
Q4 EBITDA Margin	27.7%	–
Q4 PAT	₹234 crore	–
Full-Year PAT	₹258 crore	+122%
ROCE	9.7%	Up from 6.4%
Capex	₹659 crore	Mostly into CDMO/CMO
Net Debt	₹2,594 crore	Net Debt/EBITDA now at 2.3x

The company is managing its debt better and using its money wisely, focusing on high-value areas.

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FY26 Capex Plans

Laurus Labs plans to invest about ₹1,000 crore in FY26. Here’s where the money will go:

• Formulation CMO expansion
• Fermentation capacity: ₹250 crore
• New API and CDMO blocks in Vizag

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R&D and Quality Are Priorities

• R&D spending was 4.5% of sales, up 7% YoY.
• The company completed 160 audits with no critical issues.
• Laurus continues to focus on ESG (Environmental, Social, and Governance) and EHS (Environmental Health and Safety) standards.

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Market Trends and Industry Outlook

Supply Chain Shifts

• Laurus Labs sees a strong China+1 opportunity. Clients want to reduce dependency on China.
• However, full decoupling is not possible right away.
• US trade policies and tariffs haven’t had much impact yet, but supply chain checks take 3-4 years.

ARV Funding Risks

• Around 20% of ARV formulation revenue depends on US-backed programs.
• No big changes are expected in FY26 from this.

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Operational and Segment-Level Insights

CDMO Project Pipeline

• The number of active CDMO projects rose from 60 to 110.
• Most are in Phase 2 and Phase 3, indicating future revenue potential.

Working Capital and Staffing

• Working capital remains high due to longer cycles and exports to the US and Canada.
• Around 40% of Laurus Labs’ staff work in R&D and quality.
• Employee attrition is in the early to mid-teens, which is manageable.

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Challenges Laurus Labs Faces

Here are a few areas that need watching:

• Working capital pressure: CDMO projects are complex and require more time and money.
• ARV growth has plateaued: It’s a mature business now.
• ROCE (Return on Capital Employed) is still improving but needs time to get back to older levels.
• No forward guidance: Management is careful and doesn’t give specific forecasts due to customer confidentiality.

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Management’s View and Future Plans

The management remains confident and expects strong growth in FY26. But they are also careful:

• Capital spending will remain focused and efficient.
• No new big plants are planned unless really needed.
• Laurus Labs wants to grow in a disciplined and scalable way.
• The long-term goal is to be a leading CDMO-CMO company with modern tech and a strong product pipeline.

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Other Updates

JV with Krka

• Still in early stages.
• No details yet on the products or therapies.

Animal and Crop Sciences

• Animal health is likely to see strong growth in FY26.
• Crop sciences are still being developed and not yet a big revenue contributor.

ADC and Gene Therapy Facility

• $15 million will go into this setup.
• It will focus on conjugation, not monoclonal antibody production yet.

No Divestment Plans

• Management is not planning to sell or spin off any units right now.
• They want to grow to a certain scale first before thinking about unlocking value.

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Conclusion: Laurus Labs is Building for the Future

Laurus Labs is not just sticking to old strengths. The company is clearly focused on the future of healthcare manufacturing. With a strong push into CDMO, gene therapy, and biologics, Laurus is setting up for long-term growth.

Even though the ARV business is steady, the real excitement lies in its new and upcoming segments. Growth might take time, but the direction is clear.

With smart capital use, a stronger pipeline, and committed leadership, Laurus Labs is preparing for a much broader and stronger presence in global pharma markets.

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FAQs on Laurus Labs FY25 Results

What was Laurus Labs’ revenue in FY25?

Laurus Labs reported revenue of ₹5,554 crore for FY25, which is a 10% increase compared to the previous year.

Is Laurus Labs moving away from ARVs?

Yes, the share of ARV business is shrinking. It made up 67% of revenue five years ago but now contributes 45%.

What is driving Laurus Labs’ future growth?

The main growth will come from CDMO projects, especially in small molecules, gene therapy, and ADCs.

How much will Laurus Labs invest in FY26?

The company plans to spend around ₹1,000 crore, mostly on expanding high-value manufacturing capacity.

Is Laurus Labs profitable?

Yes, profit after tax (PAT) in Q4 FY25 was ₹234 crore, and for the full year, it reached ₹258 crore, up 122% year-on-year.

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