Divi's Laboratories analysts remain divided on prospects after Q4 results; Check key triggers & risks

Shares of Divi's Laboratories Ltd. declined in early trade on Monday, May 25, even as the company's fourth quarter earnings were largely in-line with estimates.

Its revenue increased by 10%, led by segments such as custom synthesis. The company's margins were within the 32% - 34% range.

The company's profit increased by 13% to ₹751 crore from ₹662 crore last year, while revenue was up 10% to ₹2,831 crore. The company's EBITDA increased by 5% to ₹934 crore from ₹886 crore and margins contracted to 33% from 34.3% in the year-ago period.

The company reitereated its double-digit growth target for the financial year 2027. It expects margins to remain broadly stable at 32% in FY27.

Divi's Laboratories said new products should start contributing to volumes in FY27. The company remains focused on execution pipeline.

Brokerages

Brokerages have mixed views on Divi's Laboratories with Jefferies having a "buy" rating and Kotak Institutional Equities having a "sell" recommendation, both projecting an upside and downside of 15.2% each.

Jefferies The Bull

The brokerage has a "buy" rating with a price target of ₹7,950 per share, an upside of 15.2% from its previous close.

It said the company's fourth quarter was largely in-line with estimates, with strong growth in custom synthesis and nutraceuticals. Its generics business declined 7% from last year, despite the forex benefit, it said.

The company's guidance indicates continued double-digit growth and it plans to expand into peptides. The timelines for the key custom synthesis projects remain uncertain, the brokerage said.

Kotak Institutional Equities

On the flip side, Kotak has a "sell" recommendation on the stock with a price target of ₹5,850 per share, implying a downside of 15.2% from its previous close.

It said the company reported 4% operating miss in the fourth quarter due to slightly lower CSM growth.

Divi's Laboratories' ability to offset potential weakness in Entresto sales in EU remains key, the brokerage said.

Its client engagement remains strong with multiple projects. The company's capex increased significantly in FY26 and is expected to stay elevated in FY27, it added.

The brokerage said Divi's Laboratories' valuations of 49 times its estimated price-to-earnings ratio for FY28, is already pricing in growth potential.

Of the 33 analysts who have coverage on the stock, 15 have a "buy" rating, seven have a "hold" rating and 11 have a "sell" rating.

Shares of Divi's Laboratories have recovered from opening lows, now trading little changed at ₹6,888. The stock is up 6.5% in the last one month and 8.5% so far in 2026.

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