Earnings Outlook
Custom synthesis ops to drive Divi's Labs' Jan-Mar PAT
This story was originally published at 11:07 IST on 15 May 2025
Register to read our real-time news.Informist, Thursday, May 15, 2025
By Narayana Krishna
HYDERABAD – Strong growth in the custom synthesis business and traction in contrast media sales are likely to help Divi's Laboratories Ltd. report decent earnings for the March quarter, according to analysts. Divi's Labs is expected to report a 15% on-year and 3% sequential rise in its net profit to INR 6.1 billion for the March quarter, according to estimates from 10 brokerages. The company's revenue for the quarter is seen rising 13% on year and 11% on quarter to INR 25.5 billion, the estimates show.
Divi's Labs manufactures tailor-made specialty chemicals, which are not readily available, for pharmaceutical companies under its custom synthesis business. This segment contributes nearly 50% of the company's total sales.
Analyst projections for Divi's Labs' March quarter net profit range from a low of INR 5.2 billion by Motilal Oswal Financial Services Ltd. to a high of INR 7.2 billion by Nuvama Wealth Management Ltd. Revenue projections range from a low of INR 23.9 billion by Equirus Securities Pvt. Ltd. to a high of INR 27.7 billion by Nuvama Wealth.
According to analysts, Divi's Labs' custom synthesis business likely continued its growth in the March quarter, offsetting weakness in the generic active pharmaceutical ingredients segment, which accounts for over 45% of the total sales. The newly started contrast media business likely saw improved sales during the quarter, contributing to profitability. Divi's Labs provides contrast media products used in radiology and other imaging applications in the healthcare sector.
Nuvama Wealth projected a 20% on-year revenue growth for the March quarter, driven by improvement in the custom synthesis segment and sustained uptake in one of its key products—Sacubitril/Valsartan, which treats heart failure in adults. Elara Securities expects a 10% on-year growth in Divi's Labs' March quarter revenue, while Motilal Oswal sees a 6.5% on-year growth. Equirus projects a 4% on-year and 3% on-quarter growth in revenue for Divi's.
According to Kotak Institutional Equities, Divi's Labs' generic API segment likely grew 12% on year and 15% on quarter, while the custom synthesis segment is expected to grow 10% on year and 5% on quarter. The nutraceuticals segment likely saw a healthy 14% on-year rise in sales, while overall sales for the quarter are expected to rise 11% on year, Kotak said.
Most analysts projected Divi's Labs' earnings before interest, tax, depreciation, and amortisation margin for Jan-Mar to expand due to a healthy product mix. Kotak projected a 140-basis-point on-year improvement in Divi's Labs' March quarter EBITDA margin, while PhillipCapital India Ltd. projected a 100 bps on-year ris. The average of estimates from 10 brokerages pegs the company's latest quarter EBITDA at INR 8.2 billion. Nuvama expects depreciation costs to slightly increase due to the commissioning of Unit-3 at Kakinada, Andhra Pradesh.
The company is scheduled to announce its March quarter earnings on Saturday. Analysts are closely watching the progress of the production ramp-up at Kakinada, GLP-1-related bulk drug supply orders from global customers, and the impact of the Sacubitril/Valsartan patent expiry.
At 1046 IST, Divi's Labs' shares traded at INR 6,227.50 on the National Stock Exchange, up 0.2% from its previous close. The stock has risen nearly 6% since the company had released its December quarter results on Feb. 3.
Following are the Jan-Mar earnings estimates for Divi's Laboratories Ltd. based on reports from 10 brokerage firms in the descending order by the estimate of net profit:
Brokerage name | Net Sales | Net Profit | EBITDA |
| --in INR million-- | ||
Nuvama Wealth Management Ltd | 27,657.00 | 7,177.00 | 8,752.00 |
Choice Equity Broking Pvt Ltd | 26,629.00 | 6,654.00 | 8,636.00 |
Prabhudas Lilladher Pvt Ltd | 26,435.00 | 6,373.00 | 8,773.00 |
Elara Securities (India) Pvt Ltd | 25,333.00 | 6,307.00 | 8,418.00 |
Kotak Institutional Equities | 25,606.00 | 6,296.00 | 8,470.00 |
PhillipCapital (India) Pvt Ltd | 26,131.00 | 6,165.00 | 8,571.00 |
ICICI Securities Ltd | 24,728.00 | 5,832.00 | 8,086.00 |
Systematix Shares and Stocks (India) Ltd | 24,182.00 | 5,646.00 | 7,645.00 |
Equirus Securities Pvt Ltd | 23,863.00 | 5,408.00 | 7,318.00 |
Motilal Oswal Financial Services Ltd | 24,529.00 | 5,243.00 | 7,704.00 |
Average | 25,509.30 | 6,110.10 | 8,237.30 |
End.
US$1 = INR 85.62
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
