Morepen Labs hits 20% upper circuit as Q1 profit jumps nearly fourfold on margin expansion

Shares of Morepen Laboratories hit the 20% upper circuit on Tuesday after the pharmaceutical company reported a nearly fourfold jump in its June-quarter net profit, driven by robust margin expansion, strong export growth and the commercialisation of its contract development and manufacturing organisation (CDMO) business.

The stock surged 20% to ₹69.18 apiece on the NSE during the session after the company reported a consolidated net profit of ₹56.4 crore for the quarter ended June 30, compared with ₹10.8 crore a year earlier. Revenue from operations rose 34.1% year-on-year to ₹570.1 crore from ₹425.2 crore. EBITDA climbed to ₹82.5 crore from ₹24.2 crore, while the EBITDA margin expanded sharply to 14.5% from 5.7%, reflecting improved operating leverage and a healthier business mix.

CDMO milestone lifts sentiment

In its earnings release, Morepen said the quarter marked a strategic milestone as its previously announced ₹825-crore CDMO mandate entered full-scale commercialisation, with commercial supplies worth ₹58 crore already dispatched during the quarter. The company described the development as a validation of its strategy to transition from a traditional API manufacturer to an innovation-led contract manufacturing platform.

"Q1 FY27 marks an important validation of Morepen's transformation journey. The company has delivered its highest-ever quarterly revenue, strong profitability improvement and meaningful operating leverage. More importantly, our ₹825 crore CDMO mandate has now entered full-scale commercial execution," chairman and managing director Sushil Suri said.

Exports, APIs drive growth

The company said export revenue more than doubled during the quarter, rising 111% year-on-year, while its API business grew 31% and API exports increased 42%. Its medical devices business also posted 19% growth, providing another engine of expansion. Morepen added that it completed its fourth consecutive USFDA inspection without any Form 483 observations, strengthening its regulatory track record.

Looking ahead, Suri said the company would focus on expanding manufacturing capacity, improving API profitability, deepening customer relationships and strengthening its scientific and compliance capabilities.

"With API profitability recovering, exports growing strongly and Medical Devices continuing to scale as a second growth engine, Morepen is entering the next phase with greater confidence," he said.