Divi's Laboratories' June-quarter profit, margin miss estimates
While the Hyderabad-based drugmaker's revenue from operations rose 13.7% year-on-year to ₹ 2,410 crore, its net profit jumped 26.7% to ₹ 545 crore.
On a standalone basis, its net profit stood at ₹ 557 crore in the first quarter of 2025-26.
A poll of 18 brokerages by Bloomberg had pegged the revenue at ₹ 2,462 crore and net profit at ₹ 582.7 crore.
The company's Ebitda increased 17.2% on-year to ₹ 729 crore. Its Ebitda margin expanded slightly to 30.25% as against 29.37% a year ago. Ebitda is earnings before interest, taxes, depreciation and amortization.
Brokerages Kotak Securities and Nuvama had pegged the company's Ebitda margin to expand to 33-34% in the quarter under review.
Its generics business generated 47% of its overall revenue, and the custom synthesis business generated the rest.
Divi's manufactures drugs for generic players as well as innovators. Custom synthesis refers to the production of specific chemical compounds, such as novel APIs or intermediates, tailored to a client's needs. APIs are core components of a medicine responsible for making its treatment effective.
Persistent pricing pressure in global markets, particularly the US has affected generic drugmakers and weighed on Divi's as well. The company's management, however, told investors in an earnings call on Wednesday that the firm continues to be resilient on account of its strong backward integration.
Divi's has seen increased interest from global innovators as well, the company's management said. As innovators look to derisk and diversify supply chains away from China, Indian CDMO giants like Divi's are poised to gain. The company has seen a steady increase in requests for proposals.
In the last quarter of 2024-25, the company announced a long-term manufacturing and supply agreement with a leading global pharmaceutical company for which it is investing ₹ 650-750 crore. In January, it commenced commercial operations at Unit 3 of its Kakinada facility.
This year, the company is planning to execute three capex programmes with an estimated expenditure of ₹ 2,000 crore, chief executive Kiran Divi told investors.
Divi's Laboratories shares closed at ₹ 6,183 on National Stock Exchange on Wednesday, down 3.53% as the company's earnings missed estimates.
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