Divi’s Laboratories Q1FY26 PAT Rises 26.7% YoY to ₹545 Cr; Stock Falls 3.5% Despite Strong Earnings

Mumbai, 6 August 2025: Divi’s Laboratories Ltd (NSE: DIVISLAB, BSE: 532488) posted a robust financial performance for the quarter ended 30 June 2025 (Q1FY26), with consolidated Profit After Tax (PAT) jumping 26.7% YoY to ₹545 crore from ₹430 crore in Q1FY25. Revenue from operations increased by 13.8% YoY, reaching ₹2,410 crore, driven by improved cost efficiency and favourable forex movements. However, on a sequential basis, both revenue and profits registered a decline compared to the previous quarter.

PAT Surges to ₹545 Cr in Q1FY26, Grows 26.7% YoY But Declines 17.6% QoQ

Divi’s Laboratories delivered a strong YoY growth in profits, with consolidated PAT rising from ₹430 crore in Q1FY25 to ₹545 crore in Q1FY26. The company benefited from a ₹39 crore forex gain in Q1FY26, a significant reversal from a ₹1 crore forex loss in the same quarter last year. However, the PAT dropped 17.6% sequentially, compared to ₹662 crore in Q4FY25, reflecting some margin pressure and base effect.

Revenue from Operations Climbs 13.8% YoY to ₹2,410 Cr; QoQ Decline Seen

Total revenue from operations grew to ₹2,410 crore in Q1FY26 from ₹2,118 crore in Q1FY25. However, compared to Q4FY25, revenue slipped by 6.8%, showing a temporary slowdown on a sequential basis. Total income stood at ₹2,529 crore, a 15.1% YoY growth from ₹2,197 crore, though 5.3% lower QoQ from ₹2,671 crore.

Standalone PAT Grows 29.5% YoY to ₹557 Cr, Backed by Healthy Revenue Growth

On a standalone basis, Divi’s Laboratories reported a PAT of ₹557 crore, up 29.5% YoY, as revenue grew to ₹2,357 crore from ₹2,063 crore in Q1FY25. The standalone Profit Before Tax (PBT) stood at ₹747 crore, a 23.9% YoY increase. The EPS improved to ₹20.95 from ₹16.18 in the year-ago quarter, reflecting solid profitability.

Forex Gain of ₹39 Cr and Lower Tax Rate Contribute to Improved Margins

The company’s bottom line was supported by a forex gain of ₹39 crore in Q1FY26, reversing the ₹1 crore loss in Q1FY25. Additionally, the effective tax rate dropped to approximately 25.6%, compared to 28.8% in Q1FY25, aiding net profit expansion. This combination of tax efficiency and forex benefit significantly enhanced the company’s overall margins.

CEO Highlights Operational Efficiency Amid Global Uncertainty

Commenting on the performance, Dr. Kiran S Divi, Whole-time Director and CEO, stated:

“We are pleased with the steady start to FY26. Despite global headwinds, our operational efficiencies and favourable forex environment contributed positively to our margins.”

Divi’s Stock Slumps 3.5% to ₹6,183 Despite Strong Q1FY26 Results

Despite the positive financial performance, shares of Divi’s Laboratories fell 3.5%, closing at ₹6,183 as of 3:30 PM IST on August 6, down from the opening price of ₹6,410.50. The stock opened at ₹6,410.50, touched a high of ₹6,449.00, and hit a low of ₹6,054.50 during the session.

Divi’s current market capitalisation stands at ₹1.64 lakh crore, with a P/E ratio of 74.78 and dividend yield of 0.49%. The stock’s 52-week range spans ₹4,615.55 to ₹7,071.50.

Divi’s Laboratories Key Performance Metrics Signal Strong Margins and Profit Growth

• Net Profit Growth (YoY): 26.7%, surpassing the industry median
• Operating Profit Margin (Q1): 30.2%, among the highest in the sector
• Return on Equity (ROE): 14.6%, above industry standards
• Revenue Growth (YoY): 13.8%, demonstrating healthy top-line performance
• Piotroski Score: 7, indicating strong financials
• Institutional Holding: 38.79%, with a slight increase of 0.06% in the latest quarter
  These metrics underline the company’s resilience in navigating industry challenges and maintaining profitability.

Divi’s Laboratories Ltd, headquartered in Hyderabad, is a leading player in the pharmaceutical industry, specialising in the manufacture of Active Pharmaceutical Ingredients (APIs), intermediates, and nutraceutical ingredients. Listed on NSE (DIVISLAB) and BSE (532488), the company operates with a global footprint spanning 95+ countries, and its facilities comply with stringent USFDA and EU regulatory standards.

REF:https://nsearchives.nseindia.com/corporate/DIVISLAB_06082025114912_BM_Outcome_06082025Divis.pdf

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