Divi's Labs Q2 Review: Should You Buy The Stock After Earnings? Here's What Brokerages Say

Brokerages have shared mixed sentiment on Divi’s Laboratories following its September-quarter performance, highlighting the company’s growth in custom synthesis and the potential within its peptide and GLP-1 portfolio while acknowledging challenges in the generics segment.

Nuvama Institutional Equities maintained a ‘buy’ rating with an increased target price of Rs 6,830, following Divi’s "optimistic" second quarter outperformance, led by CS growth and further expansion opportunities. The brokerage highlighted new projects such as GLP-1 commercialisation, expected to materialise over the next 15 months, and the Kakinada project, which is set to begin phased production by December. Nuvama sees Divi’s as well-positioned to leverage these opportunities, although it cautioned that currency fluctuations could affect profitability given the company’s export focus.

Citi Research also expressed a positive outlook, upgrading the target price to Rs 6,850 with a ‘buy’ rating. Citi analysts noted Divi’s strong potential in GLP-1, suggesting the company is positioned to capitalise on demand in this high-growth therapeutic area. They view Divi’s as capable of securing a competitive edge over European and Chinese firms due to cost advantages and ongoing geopolitical shifts. Citi noted an increase in customer interest and order flows in custom synthesis, reflecting a shift towards Divi’s in the supply chain.

Overall, while brokerages recognise the promising growth in Divi’s custom synthesis and upcoming projects, especially in peptides and GLP-1, challenges in generics remain a concern. 

Shares of the company closed 0.17% lower at Rs 5,949.85 per share, compared to a 0.21% decline in the NSE Nifty 50. The stock has risen 52.41% year-to-date and 70.33% over the past 12 months.