Divi's Labs Shares In Focus: Citi Reaffirms 'Buy' With Rs 11,700 Target On Oral Wegovy Upside

Citi has maintained its Buy rating on Divi's Laboratories with a target price of Rs 11,700, highlighting potential opportunities for the Indian contract development and manufacturing organisation (CDMO) from the scale-up of Novo Nordisk's oral Wegovy. According to Citi, the ramp-up of Novo Nordisk's oral Wegovy could create potential optionality for Indian CDMOs, with Divi's Laboratories particularly well positioned to benefit.

Citi said Divi's has an integrated and cost-efficient peptide manufacturing platform, which could provide an advantage as demand for peptide-based therapies expands.

The brokerage, however, noted that Eli Lilly's Tirzepatide remains the largest GLP-1 and peptide opportunity for Divi's. Citi believes any participation by Divi's in the oral Wegovy opportunity should currently be viewed as potential optionality rather than a core earnings driver.

Novo Nordisk's oral Wegovy is part of the broader shift towards oral GLP-1 treatments, potentially expanding the addressable market for obesity and diabetes therapies. For CDMOs, increased peptide demand could translate into opportunities across manufacturing and supply chains.

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Citi said Divi's integrated manufacturing capabilities and cost-efficient peptide platform could position the company to participate in such opportunities. The brokerage believes the company's existing capabilities provide a strong foundation as peptide-based drug manufacturing scales up.

Despite the potential from oral Wegovy, Citi continues to view Tirzepatide as the more significant peptide opportunity for Divi's. The company is already exposed to the broader GLP-1 ecosystem, and any additional business linked to Novo Nordisk's oral Wegovy could provide further upside if it materialises.

Citi has therefore retained its Buy rating on Divi's Laboratories and a target price of Rs 11,700. The brokerage continues to identify Divi's as its top pick in the Indian pharmaceutical sector.

Divis Lab Share Price Today

Divi Labs shares closed 2.91% higher at Rs 9,624 per share on Wednesday. The shares have risen 5.09% in one week and 11.95% in one month. The shares are up 51.7% year-to-date and 59.05% in one year.

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