Laurus Labs Q1 FY27: Record revenue, CDMO surge, and a capex-led portfolio shift

Laurus Labs reported its strongest quarter yet in Q1 FY27, combining record revenue with a sharp improvement in profitability. Consolidated revenue came in at 2,026 crore, up 29% year on year. EBITDA rose to 644 crore, up 66%, with margins expanding to 31.8%. Net profit more than doubled to 368 crore, and EPS increased to 6.8.

The quarter also reflected a clear shift in the company’s mix. CDMO grew faster than the legacy generics business, and that mix change showed up in gross margins. Gross margin improved to 62.7%, up 330 basis points year on year. Management attributed the gains to a healthier business mix and improving operating leverage, while continuing to invest heavily in capacity and newer modalities.

Segment mix: CDMO takes a larger share

The largest driver of the quarter was CDMO. The CDMO division delivered revenue of 870 crore, up 67% year on year and 48% quarter on quarter. Within this, small molecules CDMO was the standout at 835 crore, growing 69% year on year and 59% sequentially. The company said the growth was driven by steady progression of late-stage clinical projects and commercial API supplies.

Affordable Medicines, which includes the company’s generics API and formulations businesses, remained larger in absolute terms but grew at a slower pace. The division reported revenue of 1,156 crore, up 10% year on year but down 5% sequentially. Formulations (FDF) grew to 502 crore, up 22% year on year and 11% quarter on quarter. API revenue was 654 crore, up 3% year on year but down 15% sequentially.

ARV revenue, which includes ARV API and formulations combined, was 669 crore. That was up 3% year on year and down 2% quarter on quarter.

The bio business reported revenue of 35 crore, up 21% year on year but down sharply from 65 crore in Q4 FY26.

Execution and investments: capacity build-out across multiple platforms

Management highlighted that capex remained a central theme. Q1 capex was 394 crore, equivalent to 19% of revenue. The presentation stated that more than 85% of the company’s capex is growth capex. Cumulative capex addition for FY22 to FY27 was stated as 4,700+ crore, including CWIP, labs and development, effluent treatment, and maintenance up to June 2027.

The company positioned the capex program as diversified across multiple technologies and portfolios. It explicitly called out investments spanning API, formulations, peptides, fermentation, gene therapy, and antibody drug conjugates. It also cited a healthy order book and internal pipeline.

Laurus also detailed its manufacturing and R&D footprint. It disclosed 15 manufacturing assets and 6 R&D assets, with 1,570 research scientists and a GLP lab facility of 56,000 square meters. Capacity figures included 8,300 kL of API capacity, 12 billion units of formulations capacity, and 240 kL of fermentation capacity.

R&D spending was reported at 118 crore in the quarter, which was 5.8% of revenue. The company stated this was up 74% year on year, driven by development work for building advanced biologics infrastructure. It also noted that this included 35 crore towards advanced biologics capex and R&D.

Strategy updates: fermentation, advanced biologics, and KRKA JV

In bio, Laurus said it is seeing traction from enzymatic technology application across small molecule clinical and commercial API projects. It also stated that its fermentation manufacturing site at Vizag with planned capacity of more than 400 kL is on track, and that customer capacity blocking discussions are underway. The facility is expected to be commissioned by Q3 FY27.

In advanced biologics, the company highlighted progress in both ADC and cell therapy. It stated it has in-licensed two ADC assets from Aarvik Therapeutics for development and commercialization in India, doubled its process development team in the last six months, and is building a facility focused on an integrated offering that includes process development, bioconjugation, and finished ADC capabilities. The company said the facility qualification is expected by end 2027.

On cell therapy, it reported more than 660 infusions as of June 2026. It also stated that its second GMP facility in Navi Mumbai was operationalized in March 2026, with capacity to produce more than 2,500 treatments. Strategic priorities listed include accelerating NexCAR19 clinical adoption, expanding the portfolio, and pursuing global partnerships and licensing opportunities.

In Affordable Medicines, the company said momentum continued despite macro volatility. It cited a healthy order book, steady ARV, and product volume growth and new launches in the US. It also referenced supply chain challenges but said it has maintained a consistent deliveries track record.

A notable operational milestone was the KRKA JV update. The company said the formulations site progress is fully on track, and Phase I production blocks are expected to open in mid 2027, focusing on high potent and general oral solid dosage capability.

The filings disclosure provided additional context. It reported cumulative DMF filings of 92. For developed market formulations, it stated 2 dossiers were filed in Q1 FY27 and there were no approvals in the quarter, taking cumulative products filed to 96.

Quality and ESG: audit cadence and SBTi validation

Quality and compliance remained a key theme. The presentation cited 54 successful inspections by major regulators and more than 1,425 quality audits and inspections by customers and regulators since inception. For Q1 FY27, it stated 24 quality audits were completed. It also referenced ongoing upgrades to its quality management system and digitization, including LIMS implementation at Unit 04 with plans to roll out to additional sites.

On sustainability, Laurus confirmed its SBTi targets for 2031. It targets a 42% absolute reduction in Scope 1 and 2 emissions by FY31 versus FY25 and a 51.6% intensity reduction in Scope 3 emissions per rupee by FY31 versus FY25. It also stated a plan to source more than 50% electricity from renewables by 2031 via power purchase agreements for all sites. ESG recognitions listed include EcoVadis Silver (Top 15%) in June 2026 and MSCI ESG rating BBB.

What to track from here

The Q1 FY27 result reinforces that Laurus is in the middle of a portfolio transition. CDMO is now a larger growth engine and is already shaping consolidated margins through mix shift. Affordable Medicines still accounts for the majority of revenue, but the growth rate differential is widening.

At the same time, the company is in an investment-heavy phase. Q1 capex at 19% of revenue and the multi-year capex program across technologies raise the stakes on execution and utilization. Management has laid out several concrete timelines, including the fermentation facility commissioning expected by Q3 FY27, the KRKA JV Phase I blocks expected in mid 2027, and the advanced biologics facility qualification expected by end 2027.

For investors, the near-term focus is likely to remain on whether CDMO growth sustains at elevated levels, whether margins hold as the mix evolves, and how quickly new capacities translate into commercial output. The company’s disclosures show strong momentum in the core small molecules CDMO engine, while also making visible bets in fermentation and advanced biologics that will take time to scale.