LAURUSLABS Q2 FY27 Results Analysis: PAT Surges 126%, EBITDA Margin Beats Guidance

LAURUSLABS reported Q2 FY27 numbers with revenue of Rs. 2,206.37 Cr (+33.44% YoY) and PAT growth of +126.43% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Q2 FY27 delivered a >400bps beat on the >30% EBITDA margin guidance at 34.01%, with revenue up 33.44% YoY and PAT to equity holders up 126.43% YoY on cost discipline (other expenses +0.82% YoY). Gross margin of 63.01% absorbed solvent cost inflation, and leverage softened to 1.03x even as H1 capex of Rs.864.19 Cr ran ahead of the Rs.3,000 Cr FY27-28 plan. Watch items are the inventory build (Rs.316.91 Cr H1 cash absorption) and CFO/EBITDA conversion at 0.58x during the capex phase.

Key Investment Insights

Key Positives

• Revenue grew 33.44% YoY to Rs.2,206.37 Cr (+8.89% QoQ)
• PAT to equity holders grew 126.43% YoY to Rs.441.48 Cr; basic EPS Rs.8.17 vs Rs.3.61
• EBITDA margin of 34.01% exceeded the >30% FY27 guidance by ~400bps and expanded ~962bps YoY
• Gross margin of 63.01% beat the 61.4% sustain guide despite solvent cost inflation
• Other expenses grew only 0.82% YoY against 33.44% revenue growth
• Net debt/LTM EBITDA softened to 1.03x from 1.28x while equity grew 13.80%
• H1 capex of Rs.864.19 Cr tracks ahead of the Rs.3,000 Cr FY27-28 plan; CWIP up 65.84%
• Interim dividend of Re 1.00/share declared; standalone ETR of 25.31% matched the 25% guide

Risk Factors

• Cost of materials grew 14.63% QoQ vs revenue +8.89% QoQ on petro-linked solvent/raw-material inflation
• Inventory build of Rs.129.61 Cr in Q2 (Rs.316.91 Cr H1 cash outflow) is a working-capital drawdown ahead
• FCF was negative at Rs.(59.23) Cr in H1 as capex nearly doubled to Rs.864.19 Cr
• CFO/EBITDA conversion fell to 0.58x from 1.39x in H1 FY26
• Q2 consolidated ETR of 26.20% sits at the top edge of the guided 25-26% band
• Non-controlling interests absorbed a Rs.(5.29) Cr quarterly loss (Rs.(10.82) Cr H1)