Laurus Labs, PNB Housing shares rallied up to 11% today; here are target prices

Laurus Labs Ltd and PNB Housing Finance Ltd climbed up to 11 per cent in Friday's trade, following their September quarter results. While PNB Housing's net profit growth at 23 per cent beat Street estimates, Laurus Labs' 46 per cent plunge in Q2 profit disappointed analysts and yet the stock rallied.

Shares of Laurus Labs climbed 7.38 per cent to hit a high of Rs 478.95. PNB Housing Finance shares, on the other hand, surged 10.90 per cent to Rs 1,035.

PNB Housing Finance’s Q2 profit grew 23 per cent YoY at Rs 471 crore against Nirmal Bang's estimate of Rs 463 crore, led by higher other income and lower provisions. Q2 disbursements grew strong at 28 per cent YoY and Nirmal Bang is building in a growth of 17 per cent in FY25 driven by EM segments. NIM is seen sustaining at 3.5 per cent, supported by growth in high-yield segments, while Opex is expected to stay elevated as the company opens new branches.

"We marginally adjust our FY25/ FY26E estimates on strong disbursements in Q2. Reiterate BUY with a target price of Rs 1,100 (1.5 times Sep’26E ABVPS). Premium over 5-year average P/ABV of 0.9 time is justified given the shift towards Affordable Housing/ EM and strong execution on asset quality," Nirmal Bang said.

JM Financial said the shift towards high-yielding affordable and emerging markets, established operating infrastructure, strong recovery pool and shift from super prime and HNIs to prime and mass affluent customers, will drive healthy return ratios for PNB Housing going forward.

"In addition, as corporate disbursements start from 2H, we remain confident on its growth trajectory from here on. We maintain BUY with a target price of Rs 1,200 (valuing at 1.7 times FY26E BV) in return for average RoAs of 2.5 per cent over FY25-26," JM Financial said.

In the case of Laurus Labs, Antique Stock broking said the quarterly results were muted and below our estimates. But with the likely scale up of CDMO contribution in FY26, the brokerage expects gross margin to improve leading to overall improvement in profitability and driving operating leverage.

"Amongst the other business segments, we see a downside risk to our estimates in the ARV FDF segment on account of heightened competition and lower realisation. On the whole, we expect revenue to grow at 11 per cent CAGR over a two-year period and expect Ebitda margin to improve to 26 per cent by FY27 driven by operating leverage," Antique said

This brokerage believes the current Laurus Labs stock price fully captures in the optimism of scale-up in the CDMO business.

MOFSL said Laurus Labs' Q2 numbers were largely in line with its estimates. The scale-up in sales from the CDMO segment and strong operating leverage are expected to drive strong performance for 2HFY25, it said.

"Given the improving demand tailwind and increasing contribution expected from the CDMO segment over the next 3-4 years, we value Laurus at 35 times 12-month forward earnings to arrive at our target price of Rs 530. Reiterate BUY," it said.