Laurus Labs CEO Believes CDMO, API Business To Be Growth Drivers In Second Half

Hyderabad-based Laurus Labs' Founder and Chief Executive Officer Dr Satyanarayana Chava believes that the contract development and manufacturing organisation business of the company will drive its growth in the upcoming quarters.

For the quarter ended September for the financial year 2024-25 that Laurus Labs Ltd. had posted on Thursday, revenue from the CDMO-synthesis business has witnessed a 40% sequential growth at Rs 299 crore against Rs 214 crore in the preceding three months. 

Speaking to NDTV Profit, Chava said that Laurus Labs has a clear picture of its expected deliveries in Q3 and Q4 of the current financial year. 

“Our efforts and investments in man, material, and resources into the CDMO segment have already started yielding results,” he said.

The multinational pharmaceutical major's founder said that focusing on the CDMO segment aided the company achieve the financial performance for the quarter ended Sept. 2024. 

“It was partly evident in our Q2 results. The coming quarters will demonstrate why we invested so much in this space and why we allocated large resources to the projects. Internally, our team is very excited about the way the company is progressing in this space,” he said.

Expressing confidence over the company achieving strong growth in the second half, Chava said, “We are always guiding our investors and stakeholders that in FY25 first half, we do not expect growth. But in the second half, we expect significant growth."

He added, "In Q2, the CDMO segment witnessed significant growth but from H2 onwards other areas will also help", as apart from the CDMO business, revenue will also start flowing in from the active pharmaceutical ingredient segment.

“Our API forte is in oncology and a few other segments. We have identified a few therapy areas to excel in. You will see those giving us results in FY27,” he said.

Chava attributed the 16% downtick in API revenues for Q2 to the company shutting down its facility for modifications, and said that the management had anticipated a hit in that division.

“One block of our API facility is shut down for modifications and another block is undergoing modifications to suit a particular contractual delivery. This is as per the plan. Nothing surprising for us internally,” he said, adding that the facility is now back on track.  

Shares of Laurus Labs rose 7% on Friday to touch an intraday high of Rs 478.6 apiece on the NSE.  

Laurus Labs Ltd. closed 3.66% higher at Rs 463.65 apiece on the NSE against the benchmark index' decline of 0.9%.