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Informist, Wednesday, Aug. 6, 2025

By P. Madhu Kumar and Narayana Krishna

MUMBAI/HYDERABAD – Divi's Laboratories Ltd. sees capital expenditure in the financial year 2025-26 (Apr-Mar) at around INR 20 billion, up INR 6 billion from INR 14 billion announced earlier, the company said in a post-earnings conference call with analysts. The capex is mainly for three new large custom synthesis projects, the company said. The custom synthesis business accounts for 53% of the company's total revenue. The capex will be backed by long-term supply commitments, further strengthening the capacity.

The company's management said that raw material prices remained stable throughout the June quarter with availability being healthy. "We have taken a proactive approach by maintaining adequate safety stocks and diversifying our sourcing mix across domestic and international markets to ensure uninterrupted supply," the company said.

Talking about capacity utilisation, the management said it was 80% in Apr-Jun and this has been consistent in the last one year. Even after the new Kakinada unit became operational, the company said its capacity utilisation remains unchanged.

The company said it continues to integrate principles of green chemistry, energy, and resource optimisation, and process excellence into daily operations, with a commitment to reduce environmental footprint while enhancing long-term competitiveness.

The active pharmaceutical ingredients manufacturer said its unit-3 facility in Kakinada, which commenced operations in January, has started contributing to the company's production and revenue. The company said the "facility is playing a critical role in supporting our backward integration strategy, strengthening supply reliability, enhancing quality management, and driving cost efficiencies."

The generics business, which accounts for 43% of the company's total revenue, is facing pricing pressure for the last few quarters, the management said. The company attributed the price squeeze to problems in shipping through the Red Sea because of attacks by Houthis and other geopolitical issues. Divi's Labs expects to start making new generic active pharmaceutical ingredient products in the next six to 12 months.

Talking about other segments, the company said its nutraceutical business has seen steady growth. The company's global nutraceutical business amounted to INR 2.50 billion for the latest quarter, as against INR 1.78 billion for the corresponding quarter of the previous financial year.

Without giving any details, Divi's Labs said it is ready to supply active pharmaceutical ingredients and other fragments of peptide category which mainly belong to Glucagon-like-Peptide-1 or GLP-1. The company is in talks with "big clients" for supply of peptide products and plans to modify flow of production as per customer demand.

Divi's Labs reported a net profit of INR 5.57 billion for the June quarter, up nearly 30% on year but lower than analysts' estimate of INR 6.00 billion. The company's revenue came in at INR 23.57 billion, up 14% on year. Shares of the company ended more than 4% lower at INR 6,133.50 on the National Stock Exchange.  End

Edited by Ashish Shirke

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