Financials & valuation: Divi‘s Laboratories

Research evidence excerpt

Financials & valuation: Divi‘s Laboratories

Equities ● Pharmaceuticals

3 August 2026

Key highlights from 1QFY27 earnings call

◆ Revenue mix between generics and CS was 40:60 in 1QFY27 vs 46:54 in 4QFY26

◆ CS revenue at INR18.5bn grew 44.7% y-o-y, led by an uptick in client projects

◆ Generics (ex. nutraceuticals) revenue of INR9.3bn grew 5.8% y-o-y, as continued pricing

pressure was offset by gains from volume growth.

◆ Nutraceuticals revenue of INR3bn grew 19.2% y-o-y

◆ Divi's successfully validated several peptide fragments as of 1QFY27, with a few more

currently in the development pipeline.

◆ The company has completed the validation process for the three dedicated projects (cumulative

capex of INR20bn) though the start of commercial-scale supplies depends on client orders.

There were some shipments during 1Q related to the validation stage of these projects.

◆ For iodine-based contrast media, Divi’s is in the process of finalising a multi-year supply

contract with two key customers.

◆ Divi’s continues to work for gadolinium-based contrast media products (used for MRI). The

company is currently in Phase II/Phase III qualification stages and it expects commercial

revenue to start once its clients secure regulatory approvals.

◆ Exports contributed c90% of its revenue in 1QFY27. Exports to the US and Europe

accounted for 75% of revenue.

◆ The impact of raw material price inflation is high specifically for solvents. A few solvent

prices have also increased by 2x-3x of their historic levels.

◆ To ensure continuous client servicing and order fulfilment, the company has decided to

maintain three months of raw material inventories. Hence, it has changed raw material

purchasing terms to a rolling three-month basis (earlier on-spot sourcing).