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Divi's Labs shares gain 4% on strong Q4 show; eyes double-digit growth for FY26Divis Laboratories aims to sustain double-digit revenue growth going forward. The stock surged 4% on Monday, hitting a record high of ₹6,519.75.By Meghna Sen   May 19, 2025, 9:39:22 AM IST (Published)3 Min ReadShares of Divis Laboratories Ltd., the drug manufacturer, were trading with gains of as much as 4% on Monday, May 19, after the company reported its March quarter results. The stock had gained 6% last week.

Brokerage firm Nuvama Institutional Equities has maintained a ‘Buy’ rating on Divi’s Laboratories and raised its price target to ₹7,225 (from ₹6,830 earlier), citing new growth opportunities from its capex initiatives and exposure to GLP-1s. The new target implies a potential 15% upside from current levels.

Nuvama said in its note that Divi's beat Q4FY25 consensus estimates on all fronts, with revenue, EBITDA, and adjusted profit ahead by 1%, 7%, and 6%, respectively. The EBITDA margin was healthy at 34.3%, beating consensus by 181 basis points, driven by lower operating expenses.

Key Q4FY25 highlights included the best gross and EBITDA margins since Q2FY23 and Q1FY23, respectively, along with growth momentum in the API and nutraceutical segments.

Commercial operations at the Unit III greenfield project began in Q4FY25, helping reduce supply chain risks and improve margins through backward integration. This also eases capacity constraints at Units I and II, and adds more CDMO capacity. Both the Generic API and nutraceutical businesses showed strong growth in H2FY25, and Nuvama expects further upside in FY26.

In addition to Unit III, two other capex projects strengthen Divi’s position for new manufacturing opportunities, particularly in peptides, GLP-1s, and contract media. Nuvama estimates that the oral GLP-1 intermediate capacity alone could generate $100–175 million in revenue.

Jefferies has a 'Hold' rating on Divi's Laboratories, citing near-term patent challenges and a high valuation (51x FY27E PE). The brokerage has a price target of ₹6,200 on the stock.

Q4 results were in line with expectations, with balanced growth across generics (Gx), custom synthesis (CS), and nutraceuticals.

Divi’s has multiple ongoing projects in GLP-1/2, GIP, and small molecules. However, it is not pursuing the generic Semaglutide market, as it prefers to focus on partnerships with innovators.

Goldman Sachs has a 'Neutral' rating on Divi's Laboratories, with a price target of ₹5,800.

Divi's reiterated its double digit growth outlook.

Goldman has raised its FY25–28E earnings per share (EPS) estimates by up to 5% to reflect the Q4 outperformance, improved margin trajectory, and updated management commentary.

The company is engaged in the manufacture of Active Pharmaceutical ingredients, intermediates and nutraceutical ingredients.

Shares of Divi's Laboratories ended 0.86% higher on Friday at ₹6,268. The stock has risen 3% so far this year.Continue ReadingNote To ReadersDisclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!TagsDivis LaboratoriesDivis LabsDivis Labs Share Priceshare market today