In an otherwise weak market, shares of Neuland Laboratories surged 20% to a 10-month high of Rs 1,701.80 per share in intraday trade on Thursday. The surge came after the company reported a record EBITDA margin of 23.6% for the July-September quarter (Q2FY23).

Margins also improved by 690 basis points year-over-year in the second quarter of fiscal 2023 due to a shift in the business mix to higher-margin products and various cost optimisation initiatives.

Apart from this, the company’s profit after tax rose 88.6% YoY to Rs 38.30 crore in Q2FY23 on the back of record quarterly revenue of Rs 294 crore, up 13.9% YoY, driven by Professional and CMS verticals.

“The growth of the speciality business was driven by products in development and customers ready to launch. The main products are paliperidone, ezetimibe, donepezil and apixaban. Meanwhile, the CMS business was driven by products in development and driven by commercial molecules,” the company said.

Additionally, management expects this structural shift to result in greater operating leverage over the long term. The CMS business continues to add more significant projects, thereby increasing long-term visibility. Overall, management expects a promising future for the GDS and CMS businesses, backed by excellent execution.

Neuland Labs has developed over 300 processes and 75 APIs. The company has filed over 900 regulatory filings in the US (62 active US DMFs), European Union (EU) and elsewhere. The company’s manufacturing facilities are inspected and approved by the US Food and Drug Administration and other key regulatory agencies.

Currently, shares of Neuland Labs are at their highest level since January 2022. By contrast, the S&P BSE Sensex was down nearly 1% at 60,431 at 2:23 pm. The stock hit a new 52-week high of Rs 1,875 on December 3, 2021.