Divi's Laboratories Q2 Review: Goldman Sachs, Jefferies, JPMorgan Raise Target Prices; Kotak Maintains Sell

Divi's Laboratories received largely positive brokerage views, with three brokerages raising their target prices while maintaining positive ratings. However, Kotak remained cautious, retaining its Sell rating amid valuation concerns and risks related to Entresto exposure. Brokerages highlighted the company's custom synthesis pipeline, CDMO opportunities, and prospects in peptides and GLP-1 as key growth drivers.

Divi's Laboratories Q2 Results: Key Highlights (Cons, YoY)

• Revenue: Up 35% YoY to Rs 3,676 crore from Rs 2,715 crore.
• Ebitda: Up 76% YoY to Rs 1,566 crore from Rs 888 crore.
• Ebitda Margin: Expanded to 42.6% from 32.7%.
• Net Profit: Up 64% YoY to Rs 1,127 crore from Rs 689 crore.

What Brokerages Say On Divi's Laboratories

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Goldman Sachs

• Maintain Buy; raise target price to Rs 11,700 from Rs 10,225.
• Expects 25% revenue CAGR through fiscal 2029, driven by 35% growth in custom synthesis.
• GLP-1 commercialisation from the first half of fiscal 2028 is expected to support an 11-percentage-point expansion in Ebitda margin.
• Raises fiscal 2027–29 EPS estimates by up to 17%; forecasts 37% EPS CAGR through fiscal 2029.

Jefferies

• Maintain Buy; raise target price to Rs 12,550 from Rs 10,200.
• Dedicated CDMO projects are approaching commercialisation, with 60–70 programmes in development.
• Peptides, GLP-1 opportunities, and elevated capital expenditure support long-term growth visibility.
• Raises fiscal 2027–29 EPS estimates by 17–22%, driven by stronger sales and margins.

JPMorgan

• Maintains Overweight; raises target price to Rs 12,500 from Rs 9,100.
• Three dedicated CDMO programmes are approaching commercialisation, supporting multi-year growth.
• Peptide capacity expansion targets a position among the world's top three integrated peptide manufacturers.
• Raises fiscal 2027–29 earnings estimate by 18–30%, supported by stronger growth and margins.

Kotak

• Maintain Sell; retain target price at Rs 8,550.
• Three dedicated CSM projects are nearing commercialisation over the next one to two quarters.
• The CSM pipeline of 60–70 projects supports growth, with margins expected around 41–43%.
• Entresto exposure and demanding valuations remain risks despite strong CSM opportunities.

Also Read: Divi's Laboratories Q2 Results: Net Profit Jumps 64% To Rs 1,127 Crore, Revenue Rises 35%; Margins Expand

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