Divi's Laboratories Ltd (BOM:532488) Q4 2025 Earnings Call Highlights: Strong Financial ...
Profit Before Tax (Q4 FY25): INR 864 crores, compared to INR 713 crores in the corresponding quarter of the previous year.
Profit After Tax (Q4 FY25): INR 662 crores, compared to INR 538 crores in the corresponding quarter of the previous year.
Forex Gain (Q4 FY25): INR 10 crores, compared to a Forex loss of INR 2 crores in the corresponding quarter of the previous year.
Consolidated Total Income (FY 2024-2025): INR 9,712 crores, compared to INR 8,184 crores in the previous financial year.
Profit Before Tax (FY 2024-2025): INR 2,916 crores, compared to INR 2,163 crores in the previous financial year.
Profit After Tax (FY 2024-2025): INR 2,191 crores, compared to INR 1,600 crores in the previous financial year.
Forex Gain (FY 2024-2025): INR 48 crores, compared to a gain of INR 30 crores in the previous financial year.
Material Consumption: Approximately 40% of sales revenue for both the current and previous financial years.
Constant Currency Growth (FY 2024-2025): 18%, compared to 2% in the previous financial year.
Export Revenue (FY 2024-2025): 88% of total sales revenue, with exports to Europe and the US accounting for 73% of total sales revenue.
Product Mix (Generics to Custom Synthesis - FY 2024-2025): 46% generics and 54% custom synthesis.
Product Mix (Generics to Custom Synthesis - Q4 FY25): 49% generics and 51% custom synthesis.
Nutraceutical Business (FY 2024-2025): INR 781 crores, with INR 205 crores for the quarter ended 31st March 2025.
Assets Capitalized (Q4 FY25): INR 560 crores, with INR 337 crores for the Kakinada project.
Capital Work in Progress (as of 31st March 2025): INR 1,022 crores, with INR 162 crores for the Kakinada project.
Total Amount Spent on Kakinada Project (as of 31st March 2025): INR 1,497 crores.
Cash on Books (as of 31st March 2025): INR 3,696 crores.
Receivables (as of 31st March 2025): INR 2,855 crores.
Inventory (as of 31st March 2025): INR 3,033 crores.
Warning! GuruFocus has detected 6 Warning Sign with BOM:532488.
Release Date: May 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Divi's Laboratories Ltd (BOM:532488) reported a strong financial performance with a consolidated total income of INR 2,671 crores for the current quarter, up from INR 2,382 crores in the same quarter last year.
The company maintained stable volumes in its core generic products despite pricing pressures, showcasing resilience in a competitive market.
Divi's Laboratories Ltd (BOM:532488) signed a long-term manufacturing and supply agreement for an advanced intermediate with a leading global pharmaceutical company, enhancing its presence in the custom synthesis space.
The peptide business is gaining significant traction, with strategic investments in both solid phase and liquid phase synthesis capabilities to meet the rising demand for novel peptide-based therapies.
The company is committed to corporate social responsibility, positively impacting over 1.3 million lives through initiatives in education, healthcare, and rural empowerment.
Divi's Laboratories Ltd (BOM:532488) faces persistent global supply chain constraints and geopolitical uncertainties, impacting transit times and increasing freight costs.
The generic segment continues to experience pricing pressures due to heightened competition, affecting overall margins.
Global transit times have been notably impacted by disruptions in maritime routes, leading to extended lead times for shipments and affecting planning and production costs.
The company anticipates that the benefits from the Kakinada facility's backward integration will take time to reflect in gross margins, indicating a delay in cost savings.
Despite a strong financial performance, the company refrained from providing specific revenue or EBITDA guidance for FY 2026, indicating uncertainty in future projections.
Q: What is driving the growth in the generic business, and how does it affect margins? A: Kiran Divi, CEO & Whole-Time Director, explained that the generic business faces high competition and pricing pressure. Despite this, Divi's Laboratories maintains a dominant market position by introducing new molecules as they come off patent. Nilima Motaparti, Whole-time Director, noted that the margin improvement is primarily due to the product mix, which varies each quarter.
Q: Has the backward integration at the Kakinada facility started impacting gross margins? A: Kiran Divi confirmed that production at Kakinada began in January, and the benefits of backward integration are expected to materialize gradually. The facility is crucial for ensuring a continuous supply of raw materials, which will help manage costs and supply chain disruptions.
Q: How is Divi's Laboratories positioned in the custom synthesis (CS) business, and what is the outlook? A: Kiran Divi emphasized that Divi's Laboratories has been in the CS business since its inception, with continuous RFPs and a strong pipeline. The company is well-positioned in the CS market, with several products in various development stages, and expects continued strength in this segment.
Q: What are the company's plans for peptide capabilities and other modalities like ADCs? A: Kiran Divi stated that Divi's Laboratories is focused on manufacturing peptides for innovators, with investments in solid and liquid phase synthesis. The company is also exploring opportunities in ADCs and other modalities, although these are still in preliminary phases.
Q: Can you provide guidance on revenue growth and CapEx plans for the coming years? A: Nilima Motaparti indicated that Divi's Laboratories aims for consistent double-digit growth. The CapEx for the upcoming financial year will include ongoing projects and maintenance, with an estimated total of INR 1,400 crores plus additional maintenance CapEx.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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