Share Price of Laurus Labs Drops After Recent Surge Despite Impressive Q3 Financials

Laurus Labs Q3 Results Overview

Shares of Laurus Labs plunged 14% on January 27, snapping a two-day winning streak fueled by strong Q3 earnings. The stock had surged nearly 6% in the prior two sessions before investors opted for profit booking.

At 11:08 AM, Laurus Labs shares were trading at ₹531.55 on the NSE.

Key Highlights of Laurus Labs' Q3 FY25 Performance

Revenue Expansion:

The company reported a robust revenue growth of 18.5% year-on-year (YoY), rising to ₹1,415 crore in Q3 FY25 from ₹1,194 crore in the same quarter last year. On a sequential basis, revenue also showed a healthy increase of 16%, reflecting consistent business momentum

EBITDA Margin Breakthrough:

The company's EBITDA margin expanded by 500 basis points year over year to 20.2% in Q3. Since Q4FY23, Laurus Labs’ EBITDA margin crossed the 20% mark for the first time.

Net Profit Growth:

Laurus Labs' net profit surged to ₹92 crore, a significant jump compared to ₹23 crore in the same quarter last year. This growth was partly driven by an increase in other income to ₹9.4 crore from ₹2.4 crore a year ago.

Market Reaction

Despite positive financials, Laurus Labs' share price declined as investors locked in gains following the recent rally.

Outlook and Management Guidance

Laurus Labs' management expressed optimism, expecting further improvement in EBITDA margins driven by better asset utilization and productivity gains. Although the company did not provide specific guidance for FY25 topline growth, it highlighted its focus on building a solid foundation to drive medium-term growth.

Summary

Laurus Labs delivered robust Q3 earnings, with significant growth in revenue, net profit, and EBITDA margins. However, investors' profit booking led to a sharp drop in share price, erasing recent gains. The company's focus on operational efficiency and future growth initiatives positions it well for medium-term performance improvements.