Mukul Agrawal’s Top Portfolio Holding Extends Rally as Strong Earnings, Expanding CDMO Business and Sterile API Partnership Strengthen Long-Term Growth Outlook

Neuland Laboratories Ltd. continued its stellar run on Dalal Street on Thursday, with its shares surging over 10% during intraday trade to touch a fresh all-time high of ₹22,188 on the BSE. The rally came after the Hyderabad-based pharmaceutical company reported a robust set of earnings for the first quarter of FY27 and announced a strategic long-term partnership with Gland Pharma to expand its sterile Active Pharmaceutical Ingredient (API) manufacturing capabilities.

The stock was trading around ₹22,155, up more than 11%, by late morning, significantly outperforming the broader market. In comparison, the BSE Sensex was up only 0.24%, highlighting the strong buying interest in the pharmaceutical stock.

The latest gains further cement Neuland Laboratories’ position as one of the top-performing pharmaceutical companies in the Indian equity market this year, driven by accelerating earnings growth, increasing global demand for complex APIs, and expanding opportunities in the Contract Development and Manufacturing Organisation (CDMO) business.

Shares Continue Stellar Rally, Nearly Double From 52-Week Low

Neuland Laboratories has rewarded investors with exceptional returns over the past few months.

The stock has gained nearly 68% in the last six months, even as the benchmark Sensex declined approximately 6% during the same period. More impressively, the company has rebounded nearly 91% from its 52-week low of ₹11,500, recorded in March 2026.

The sustained rally reflects growing confidence among institutional investors, supported by consistent execution, improving profitability and rising visibility in the global pharmaceutical outsourcing market.

Market participants believe the company has emerged as one of the strongest momentum stocks within the small-cap pharmaceutical segment, with strong earnings providing fundamental support to the recent price appreciation.

Q1FY27 Earnings Significantly Beat Market Expectations

The biggest catalyst behind Thursday's rally was Neuland Laboratories’ outstanding financial performance for the June quarter.

The company delivered exceptional growth across all major financial parameters, comfortably surpassing analysts’ estimates.

Key highlights of the quarter include:

• Revenue increased by nearly 120% year-on-year

• EBITDA surged approximately 5.5 times

• Profit After Tax (PAT) jumped nearly 9.6 times compared with the corresponding quarter last year

The sharp earnings growth was driven by improved operating leverage, higher utilisation of manufacturing facilities and strong demand across both commercial manufacturing and generic API businesses.

The impressive results reinforced investor confidence that the company has entered a stronger earnings cycle after significant investments in capacity expansion over the past few years.

Commercial Manufacturing Business Emerges as Growth Engine

Neuland's Commercial Custom Manufacturing Services (CMS) division once again emerged as the biggest growth driver during the quarter.

Revenue from the commercial CMS business more than doubled compared to the previous year, reflecting increased production of commercial molecules for global pharmaceutical innovators.

The company has continued strengthening relationships with multinational pharmaceutical companies seeking reliable manufacturing partners for complex APIs and specialty pharmaceutical products.

Alongside CMS, the Generic Drug Substances (GDS) segment also reported healthy growth, supported by increasing demand across both Prime and Niche product portfolios.

The diversified revenue mix has enabled Neuland to reduce business concentration risks while improving earnings quality.

Management Sees Multi-Year Growth Momentum

During the post-results commentary, the company's management expressed confidence that the current growth trajectory remains sustainable.

Neuland expects to maintain annual revenue growth exceeding 20% during both FY27 and FY28.

The confidence is supported by several structural growth drivers, including:

• Strong late-stage development pipeline

• Healthy customer engagement with global pharmaceutical companies

• Expansion of commercial manufacturing assets

• Growing demand for peptide-based APIs

• Continued outsourcing by multinational pharmaceutical companies

• Increasing number of commercial product launches

The company also plans to add one commercial manufacturing asset during FY27 and another one or two assets during FY28, further enhancing production capabilities.

Strategic Collaboration with Gland Pharma Strengthens Sterile API Capabilities

Another major announcement supporting the stock was Neuland's strategic partnership with Gland Pharma.

The two companies have entered into a long-term CDMO collaboration under which Gland Pharma will establish a dedicated sterile API manufacturing suite at its Jawaharlal Nehru Pharma City (JNPC) facility in Visakhapatnam.

The facility will comply with stringent global regulatory standards, including USFDA and European Union GMP requirements, enabling both companies to cater to highly regulated international markets.

The new manufacturing facility will have an annual production capacity of approximately 1,400 kilograms of sterile APIs.

The partnership will primarily support the production of APIs used in:

• Microparticle depot formulations

• Complex injectable therapies

• High-value specialty pharmaceutical products

Industry experts believe the collaboration combines Neuland's expertise in complex API development with Gland Pharma's advanced sterile manufacturing infrastructure, creating a differentiated offering for global pharmaceutical companies.

CDMO Business Becomes Key Long-Term Growth Driver

Neuland's CDMO business continues to play an increasingly important role in its overall revenue mix.

During FY26, the CDMO segment generated approximately ₹1,252 crore, accounting for nearly 60% of the company's total revenue.

The business has benefited from increasing outsourcing trends as global pharmaceutical companies seek specialised manufacturing partners capable of handling complex molecules while maintaining strict regulatory compliance.

The new partnership with Gland Pharma is expected to further strengthen this business by allowing Neuland to expand into sterile API manufacturing, a niche segment with relatively high entry barriers and attractive margins.

Brokerages Remain Bullish After Earnings Upgrade

Following the stronger-than-expected quarterly results, several brokerage firms reaffirmed their positive outlook on Neuland Laboratories.

Analysts noted that the company's expanding commercial manufacturing business, robust product portfolio and growing presence in peptide APIs make it one of the highest-quality pharmaceutical compounders in India's small-cap universe.

One leading brokerage expects Neuland to deliver:

• 21% Revenue CAGR

• 29% EBITDA CAGR

• 33% Adjusted PAT CAGR

between FY26 and FY29.

Reflecting improved earnings visibility, the brokerage has retained its "Buy" recommendation and raised its target price to ₹25,819, indicating further upside potential despite the recent rally.

Mukul Agrawal's Largest Investment Continues to Create Wealth

Ace investor Mukul Mahavir Agrawal continues to remain one of the biggest beneficiaries of Neuland Laboratories' remarkable performance.

According to the latest shareholding pattern for the June 2026 quarter, Agrawal owns 4 lakh shares, representing approximately 3.1% of the company.

At current market prices, the investment is valued at nearly ₹830 crore, making Neuland Laboratories the largest holding in his publicly disclosed equity portfolio.

The investor currently owns stakes exceeding 1% in more than 70 listed companies across sectors including pharmaceuticals, manufacturing, consumer goods and financial services.

His continued confidence in Neuland has further strengthened market sentiment around the stock.

Global Pharmaceutical Outsourcing Trend Favors Neuland

The pharmaceutical manufacturing industry is witnessing a structural shift as global drug manufacturers increasingly outsource complex manufacturing activities to specialised CDMO companies.

Several factors continue to support this trend:

• Rising demand for complex biologics and specialty drugs

• Higher regulatory compliance requirements

• Cost optimisation initiatives by multinational pharmaceutical companies

• Increasing focus on supply-chain diversification

• Growth in peptide and injectable therapies

Neuland Laboratories is strategically positioned to benefit from these long-term industry trends due to its expertise in complex chemistry, strong regulatory track record and expanding manufacturing capacity.

Investment Outlook

Neuland Laboratories has delivered one of the strongest quarterly performances in the Indian pharmaceutical sector, reinforcing investor confidence in its long-term growth story. The combination of exceptional earnings, accelerating CDMO business, expanding manufacturing capabilities and a strategic partnership with Gland Pharma has strengthened the company’s competitive position in the global pharmaceutical outsourcing market.

Although the stock has already witnessed a significant re-rating over the past year, analysts believe sustained earnings growth, increasing commercial manufacturing opportunities and continued capacity expansion could support further value creation over the medium term.

For investors, Neuland Laboratories remains a company to watch as India's pharmaceutical CDMO industry continues to gain global prominence, with strong execution and innovation likely to remain the key drivers of future growth.