Divi’s Laboratories share price rises 5% a day after Q3 results. Do you own?

Stock Market Today: Divi's Laboratories share price gained more than 5% in the morning trades on Tuesday, a day after it reported its earnings for the third quarter (Q3) of the financial year 2024-25.

Divi's Laboratories Q3 Results

Divi's Laboratories consolidated net profit (attributable to the company's shareholders) for the fiscal third quarter ending December (Q3FY25) increased by 64.5% year-over-year (YoY) to ₹589 crore, as per results declared by the company on Monday. In the same quarter last year, the company generated a profit of ₹358 crore. The consolidated net profit increased by 15.5% sequentially.

Analysts Views

Jefferies India post results said that the custom synthesis business continued to drive growth but they remain concerned about product concentration that needs to be reduced.

Jefferies said that Divi’s Q3 revenue was in line with their estimates, while earnings before interest tax depreciation and amortisation (EBITDA) came in ahead on better product mix. 

“Custom synthesis continued to lead growth for the company, while the generics business also rebounded in the quarter. Generics pricing remains under pressure, which was offset by higher volume in the quarter,” said the brokerage.

Divi's remains confident about GLP-1 ( GLP 1 opportunity has 3 business segments from a manufacturing point). However, Jefferies said that it will need to overcome the high product concentration of Sacubitril Valsartan in FY27. It thereby maintained a ‘hold’ rating with a price target of ₹6,280.

Motilal Oswal Financial Services said that Divi's Laboratories has been fortifying its growth drivers in Custom Synthesis through its focus on subsegments, such as peptides and contrast media. It is also adding newer molecules in the generics space. To support customers, it is also building capacities for their future needs. Further, the cash of close to ₹3600 crore provided enough cushion to drive up projects if required. However, the current valuation as per MOFSL provides limited upside from current levels and hence it reiterated a ‘neutral’ rating on the stock.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.