Neuland Laboratories shares surged as much as 7.65% to hit an intraday high of ₹18,305 in Wednesday's trading session following the company's blockbuster Q4 performance. According to reports from The Economic Times, the pharmaceutical company's stock demonstrated strong momentum as investors responded positively to the robust financial results driven by sharp growth in both profit and revenue on a year-on-year basis. Brokerage Goldman Sachs has maintained its buy rating on Neuland Laboratories Ltd. and raised its 12-month target price to ₹19,550 from ₹17,275, with the current market price at ₹17,100. The upgraded target price implies an upside of around 14.3% from current levels.
The company reported a massive 660% jump in consolidated net profit to ₹213 crore for Q4FY26, compared to ₹28 crore in the corresponding quarter last year. As reported by The Economic Times, consolidated revenue more than doubled, soaring 136% YoY to ₹776.3 crore from ₹328.4 crore in Q4FY25, reflecting strong business momentum across key segments. Operating performance remained robust with EBITDA skyrocketing to ₹319 crore in Q4FY26 from ₹58 crore a year ago, highlighting significant margin expansion and operational efficiency. According to Goldman Sachs, the company's sales and EBITDA grew 136% and 155% year-on-year, respectively, mainly driven by its top two commercial CMS projects, with the segment growing 366% year-on-year.
The Contract Development and Manufacturing Organisation business emerged as the key growth driver, with Goldman Sachs noting that Neuland's Q4 performance was well ahead of estimates led by a strong show in this segment. The brokerage highlighted that the company's EBITDA margin at around 40% was significantly above its estimate, demonstrating operational excellence. The Generic Drug Substance business was largely in line with expectations, though shipments slowed partly due to operational issues at a customer's end. Goldman Sachs expects Neuland's topline growth to remain robust at over 20% CAGR during FY26-28E and expects the company to deliver more than 25% EBITDA CAGR over FY26-28E, mainly due to its profitable CMS and Specialty API mix.
For the full financial year FY26, Neuland Laboratories reported total income of ₹2,053.1 crore, while EBITDA stood at ₹603.4 crore, according to The Economic Times. The company has earlier guided for around 20% topline CAGR in the medium term while aiming to maintain margins in the 25-30% range. Goldman Sachs has raised its FY27-29 EPS estimates by up to 8% to factor in the Q4 beat, updated pipeline progress and revised business outlook shared by management. The brokerage noted that the company is simultaneously building the foundation for its next phase of growth through strategic investments in peptide manufacturing and a new R&D centre, both of which are progressing as planned.
On the technical front, the stock's Relative Strength Index (RSI-14) is at 67.9, suggesting strong momentum, as reported by The Economic Times. The trend remains firmly bullish as Neuland Laboratories is trading above all 8 out of 8 key Simple Moving Averages (SMAs), reflecting sustained buying strength and positive market sentiment. However, Goldman Sachs has flagged key risks including product, customer and geography concentration, execution risks in new businesses and complex products, and potential regulatory compliance issues. The brokerage expects the company to deliver sustainable long-term growth through execution discipline, customer satisfaction, and strengthening business fundamentals.
