Divi's Laboratories delivered better-than-expected performance in Q2 with a 4%/10%/10% beat on revenue/Ebitda/PAT. While gross margin has been steady for the past eight quarters, Divi's Labs has delivered improved Ebitda margin YoY as well as QoQ, led by better operating leverage.
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Motilal Oswal Report
We broadly retain our FY26/FY27/FY28 estimates. We value Divi's Laboratories Ltd. at 55x 12 months forward earnings to arrive at our target price of Rs 6,925.
Divi's continues to strengthen its position as a reliable contract development manufacturing company for global pharma players, aided by-
differentiated skill sets such as peptide and contrast media manufacturing,
enhanced reliability for supply despite geopolitical turmoil, and
a built capacity that would cater to future requirements.
Further, it continues to focus on improving operating efficiency in manufacturing generics and adding new molecules in this segment.
However, the current valuation adequately factors in the earnings upside. Reiterate Neutral.
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