Divi's Laboratories shares will be in focus heading into trade on Thursday after the company received mixed brokerage calls on account of its third-quarter earnings for the financial year ending March 2026. The Indian pharmaceutical company reported its December quarter earnings on Wednesday, posting a 12% year-on-year revenue growth.
Divi's Labs' profit in the December quarter declined marginally by 1%, but it was impacted by a one-time labour codes impact of Rs 74 crore. Margins, meanwhile, expanded to 34.2% compared to 32% in the year-ago period.
Divi's Labs Q3 Highlights (Consolidated, YoY)
- Revenue up 12.3% at Rs 2,604 crore versus Rs 2,319 crore.
- EBITDA up 19.8% at Rs 890 crore versus Rs 743 crore.
- EBITDA margin at 34.2% versus 32%.
- Net profit down 1% at Rs 583 crore versus Rs 589 crore.
- Company reported a one-time impact of Rs 74 crore due to new labour codes.
In the wake of its earnings, brokerages were largely mixed, although the general consensus is that it was an in-line quarter for Divi's Labs. Jefferies appeared the most bullish on the counter, hiking the target price, while Morgan Stanley reduced the target price, citing a subdued environment in the Generics' business.
Citi on Divi's Lab
Maintain Buy | Target Price: Rs 9,140
Q3 performance in line with estimates; management offers strong visibility for FY27/28E
A significant earnings upcycle appears on the horizon
Confident growth outlook for FY27/28E
Continued earnings momentum despite pressure in generic API pricing
Reiterates Divi's as its top pharma pick in India
Goldman Sachs on Divi's Lab
Maintain Neutral | Target Price cut to Rs 6,050 (from Rs 6,375)
Q3 in line; Custom Synthesis (CS) continues to outperform
Generics segment remains subdued
Reiterates double-digit profit growth outlook
Stays neutral on valuation comfort
Jefferies on Divi's Lab
Maintain Buy | Target Price raised to Rs 8,100 (from Rs 8,000)
Strong operational beat versus estimates
Patent overhang concerns addressed through deep pipeline
Nutraceuticals and custom synthesis maintain growth momentum
Management signals continued growth into FY27 despite key patent expiry
Three major dedicated CDMO projects to commence commercial sales from H2CY27
Outlook remains among the best in the industry
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