Divi's Laboratories — Q1 FY26
Divis Laboratories reported a strong Q1 FY26 with PAT rising 26.7% YoY to INR 545 crore, driven by robust custom synthesis traction and backward integration benefits.
bullish
medium
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
42%Questions answered6Evaded / deflected12Questions audited
Partial answer
High priority
Why gross margin lower despite generic/CS mix?
Asked by Tushar Manoharlal
Acknowledged mix change but did not explain why gross margin fell despite mix shift.
attributed to lumpinessno specific margin explanation
Read the exchange
Question
When considering the ratio of generics to custom synthesis of 47% to 53%, it implies that the API business has sort of been more or less flat year-over-year. In fact, it's reduced quarter-over-quarter as well. Given this backdrop, still the gross margin seems to be lower on a quarter-on-quarter basis.
Nilima Prasad Divi, Whole-time Director Commercial
The generic to custom synthesis ratio is 47%, 53% this quarter. The entire thing would actually reflect that the generics business had a higher component in this quarter compared to the custom synthesis. However, we have always maintained the stand that there could be lumpiness...
Evasive
Medium priority
Details on biocatalysis platform and biologic entry?
Asked by Tushar Manoharlal
Gave vague description but refused to provide any concrete details.
no specificscited confidentiality
Read the exchange
Question
Certainly, in the opening remarks, Sir commented on Bravo Catalyst in terms of this platform. If you could shed some light in terms of the kind of work that's happening in this aspect.
Kiran Divi, Whole-time Director and CEO
We are working on biocatalysis. We are working on resins. We are working on several different platforms... At this point, we are more at the pilot stage working with a few of the innovators on how to move forward on this. I'm not at the liberty to speak much more than this.
Answered
High priority
Clarify generic business percentage and pricing impact on margins.
Asked by Kunal Dhamesha, Macquarie
Clearly answered the percentage and confirmed pricing pressure impact.
Read the exchange
Question
Is the generic business 53% of the revenue this quarter, or is it 47%? ... I think in the opening remarks, we alluded to pricing pressure in the generic business. Is that something that would have impacted the gross margins of generic business this quarter?
Nilima Prasad Divi, Whole-time Director Commercial
Generic business is 47% this quarter. Yes, the pricing pressures are there in the first quarter as well. Apart from that, there are also additional costs that are being incurred by the generic business...
Evasive
High priority
Peptide capacity status and commercialization timeline.
Asked by Kunal Dhamesha, Macquarie
Did not disclose capacity or plant location; deferred to qualification process.
no capacity numbersno timeline commitment
Read the exchange
Question
The second question is on the peptide capacity. Is it now fully functional for us? If you could now share how much is the capacity that we have put up and in which plant, that would be helpful.
Kiran Divi, Whole-time Director and CEO
In terms of peptide capacity, we have created capacity for both our pilot work and also in terms of commercialization of our customers. As you know, the total process is not that, you know, we just qualify and then we can start supplying. It has to go through a total qualification process...
Evasive
Medium priority
Kakinada backward integration impact on raw material dependency.
Asked by Kunal Dhamesha, Macquarie
Did not quantify raw material dependency reduction; discussed capacity shift instead.
no quantitative reduction givenreframed to capacity freeing
Read the exchange
Question
The last part is, you know, with Kakinada phase one, let's say if we have to look at a broader level, how much raw material dependency can we reduce? Let's say our FY 2025 raw material consumption was around INR 3,700 crore.
Kiran Divi, Whole-time Director and CEO
To explain what Kakinada is doing right now, we are seeing a GMP capacity in our existing Unit 1 and Unit 2. There, we were in the past making critical starting materials, raw materials, backward integrating in a GMP facility, which we have moved to Kakinada right now...
Answered
High priority
Timeline for Kakinada GMP approval and third-party supplies.
Asked by Damayanti Kerai, HSBC
Provided a clear timeline of one to two years for regulatory approvals.
Read the exchange
Question
For Kakinada, when do you set the GMP approval to come in, which will enable you to start supplies the way you are doing right now from Unit 1 and Unit 2?
Kiran Divi, Whole-time Director and CEO
Right now, surgically, what we have done is we have emptied Unit 1 and Unit 2 with all the key starting materials and moved it to Kakinada Unit 3... certain long-forward-looking products... we are qualifying them in Kakinada, and then we will start the process, which will take at least one to two years before we have regulatory approvals in place for Kakinada.
Answered
High priority
Current capacity utilization and headroom in Unit 1/2.
Asked by Damayanti Kerai, HSBC
Gave specific utilization figure and confirmed headroom.
Read the exchange
Question
Unit 1, Unit 2, with the capacity freed up, what kind of utilization is there right now? How much headroom do you have from current level to push forward?
Nilima Prasad Divi, Whole-time Director Commercial
Currently, our capacity utilization is at 80% this quarter. It has been consistent in the last one year. Even with additional capacity of Kakinada coming into play, we are still at 80% capacity utilization, which is ideal for our organization.
Evasive
Medium priority
Asset turnover of three dedicated plants and peptide capacity.
Asked by Surya Narayan Patra, PhillipCapital
Refused to provide asset turnover or product nature due to confidentiality.
no asset turnover detailscited confidentiality
Read the exchange
Question
In terms of the asset turnover, it would be similar to the kind of existing line of asset turnover work we are having for our plants. Any of these three unit adds are relating to peptide or compound material?
Kiran Divi, Whole-time Director and CEO
There are three projects. I'm not at the liberty to talk too much about it, but the three projects are going as per schedule. They have long-term contracts with volume commitment.
Evasive
High priority
When will generic pricing stabilize and what gives confidence?
Asked by Neha, Bank of America
Did not provide concrete factors or timeline for stabilization; cited hope.
no specific stabilization triggerhoping without basis
Read the exchange
Question
Nilima ma'am made a comment about probably pricing stabilizing in the next few quarters. If you could just give some color, you know, what essentially would help stabilize this price?
Kiran Divi, Whole-time Director and CEO
If you look at the inbox comment, it's basically that we are hoping it will stabilize. The pricing pressure is basically because of several geopolitical situations happening across the world... That being said, we being backward integrated... we are able to sustain and have continued supply and we are successful in not losing any market share.
Evasive
High priority
Impact of Valsartan going generic on shipments and guidance.
Asked by Shyam Srinivasan, Goldman Sachs
Declined to comment on specific product citing confidentiality.
refused to acknowledge productno specific impact
Read the exchange
Question
It's gone generic in the U.S., as many may be aware, in the middle of July. I just want to understand, how is our shipments going to vary on the path forward for Valsartan, Acrobyl Valsartan specifically?
Kiran Divi, Whole-time Director and CEO
Firstly, I cannot acknowledge any products, so I cannot answer this question to be fair. What I can say is every brand company has their own strategy, and we will abide by what the brand requires... If you're talking about late life cycles, we do manage late life cycles with our customers.
Partial answer
Medium priority
Stage of three recently signed projects (clinical/commercial).
Asked by Abdulkader Puranwala, ICICI Securities Limited
Gave qualitative stage but no specifics on molecules or timelines.
vague stagesno specific names
Read the exchange
Question
If you could help us understand on the three projects you have recently signed, just qualitatively, if you could indicate at what stage these projects should be, whether this should be something like a molecule under clinical trial or something which is already commercialized?
Kiran Divi, Whole-time Director and CEO
Just to give you an idea, all the three molecules, some are just commercialized, some of them are commercialized, and when it's in the patents. These are not, and some, you know, they just completed phase three going forward.
Answered
High priority
New product pipeline timeline for generic segment.
Asked by Speaker 17, Marcellus Investment Managers
Provided specific product names and a clear 6-12 month timeline for commercial volume.
Read the exchange
Question
Can you please help us with the plan and timelines for the new product pipeline at Divi's reference time? You know, when would these products be launched, and what is the timeline?
Kiran Divi, Whole-time Director and CEO
Coming to the new product pipeline, we have several products like rivaracetone, figagidilor, all, and a few others already in the pipeline. We find that the DMS validations are completed, and we are waiting for our customers to get their approval so that we can start supplies. We think in the next six to 12 months, we will start seeing some movement of the products on commercial volume.