Divi’s Laboratories Ltd has reported its financial results for the first quarter of FY26, posting consolidated revenue from operations of ₹24.1 billion and net profit of ₹5.45 billion. While the numbers reflect year-on-year growth, both topline and bottom-line figures came in slightly below analyst expectations, which had pegged revenue at ₹24.56 billion and profit at ₹5.75 billion, according to IBES consensus.
The Hyderabad-based pharmaceutical major continues to face margin pressures due to pricing headwinds in generics and delayed regulatory approvals for new launches. However, its strong API portfolio and ongoing capacity expansion offer medium-term growth visibility.
Key Highlights from Q1 FY26 Results
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Revenue from Operations: ₹24.1 billion, up 9.8% year-on-year
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Net Profit: ₹5.45 billion, up 7.2% year-on-year
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EBITDA Margin: 34.6%, down 120 basis points sequentially
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EPS: ₹20.4, compared to ₹19.1 in Q1 FY25
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Forex Impact: ₹120 million gain due to favorable currency movement
Segmental Performance
Active Pharmaceutical Ingredients (APIs)
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Continued leadership in custom synthesis and generics
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Growth driven by demand for anti-viral and anti-inflammatory APIs
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Export volumes rose 6.3%, with strong traction in North America and Europe
Nutraceuticals
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Revenue contribution remained flat at ₹2.1 billion
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New product launches in the immunity and cognitive health segments expected in Q2
Contract Manufacturing
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Delays in regulatory approvals impacted order execution
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Pipeline remains strong with 14 molecules under development
Strategic Updates
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Divi’s commenced commercial operations at its Unit-III facility in Kakinada, Andhra Pradesh
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Capex of ₹1,118 crore was capitalized in FY25, with ₹755 crore allocated to Unit-III
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The company is investing ₹450 crore in green chemistry and sustainability initiatives
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R&D spend increased to ₹1.2 billion, representing 5% of revenue
Market Reaction and Analyst Commentary
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Divi’s stock closed 0.9% lower at ₹6,210 on NSE following the earnings miss
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The Nifty Pharma index remained flat, reflecting cautious sentiment across the sector
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Analysts at Kotak Institutional Equities noted that while the results were below expectations, the long-term fundamentals remain intact
Outlook and Investor Takeaway
Divi’s Laboratories continues to be a defensive play in the pharma space, with strong cash flows, zero debt, and a robust export pipeline. However, near-term headwinds such as pricing pressure, regulatory delays, and margin compression may limit upside.
Investors with a long-term horizon may consider accumulating on dips, especially as new capacities and product launches begin contributing meaningfully from Q3 onward. The company’s focus on innovation, sustainability, and global compliance positions it well for durable growth.
Source: Economic Times – August 6, 2025 Moneycontrol – August 6, 2025 Bloomberg IBES Estimates – August 6, 2025
