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Divi's Laboratories — Q2 FY26
Divis Laboratories reported a strong Q2 FY26 with consolidated revenue of INR 2,860 crore (+17% YoY) and PAT of INR 689 crore (+35% YoY), driven by robust custom synthesis (56% of revenue) and stable generic volumes despite pricing pressure.
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Divis Laboratories reported a strong Q2 FY26 with consolidated revenue of INR 2,860 crore (+17% YoY) and PAT of INR 689 crore (+35% YoY), driven by robust custom synthesis (56% of revenue) and stable generic volumes despite pricing pressure. The company highlighted strong momentum in peptide synthesis, with a new Center of Excellence and multiple projects advancing through development. Management guided for higher FY26 CapEx (exceeding INR 2,000 crore) backed by long-term supply commitments, and expects commercial benefits from three major projects within 1-2 years. However, generic pricing pressure persists with no near-term relief, and management declined to quantify peptide capacity or margin impact of new projects. Key risk: continued generic pricing erosion could offset CS-driven growth.
डिविस लैबोरेटरीज ने दूसरी तिमाही में अच्छा प्रदर्शन किया। कुल कमाई 2,860 करोड़ रुपये रही, जो पिछले साल से 17% ज्यादा है। मुनाफा 689 करोड़ रुपये रहा, जो 35% बढ़ा। यह ग्रोथ खास तौर पर कस्टम सिंथेसिस (दूसरी कंपनियों के लिए दवा बनाना) से आई, जो कुल कमाई का 56% है। जेनेरिक दवाओं की कीमतों पर दबाव है, लेकिन बिक्री स्थिर है। कंपनी पेप्टाइड (एक तरह की दवा) बनाने पर जोर दे रही है और इसके लिए नया सेंटर खोला है। इस साल खर्च 2,000 करोड़ रुपये से ज्यादा होने का अनुमान है। तीन बड़े प्रोजेक्ट से 1-2 साल में फायदा मिलेगा। लेकिन जेनेरिक दवाओं की कीमतों पर दबाव जारी रहेगा। कंपनी ने पेप्टाइड क्षमता या नए प्रोजेक्ट के मुनाफे पर असर के बारे में नहीं बताया। मुख्य जोखिम: जेनेरिक दवाओं की कीमतें गिरने से कस्टम सिंथेसिस से होने वाली ग्रोथ पर असर पड़ सकता है।
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Generic pricing pressure persists
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Read Transcript →Quarter Snapshot
Custom Synthesis Revenue Mix
56%
+16pp YoY
Custom synthesis contributed 56% of total revenue in Q2, up from 40% in Q2 FY25, reflecting strong CDMO demand.
Exports to Europe & US
74%
flat YoY
Combined exports to Europe and US accounted for 74% of total sales, consistent with prior periods.
Nutraceutical Revenue
INR 242 crore
+18% YoY
Nutraceutical segment contributed INR 242 crore in Q2, growing as a key growth driver.
Capital Work in Progress
INR 2,030 crore
+INR 463 crore H1
CWIP stood at INR 2,030 crore as of Sep 2025, with INR 463 crore capitalized in H1, indicating ongoing capacity expansion.
What Changed vs Last Quarter
NEW
Constant currency revenue growth ~10.8% for H2
Management expects constant currency revenue growth for the second half to be similar to H1's 10.79%.
UPDATED
FY26 CapEx to exceed INR 2,000 crore
Management confirmed that FY26 CapEx will be higher than the earlier guidance of INR 2,000 crore, driven by three new projects with long-term supply commitments.
UPDATED
Three major CS projects to commercialize in 1-2 years
Three dedicated custom synthesis projects are at various stages of validation/construction and are expected to contribute revenue within 1-2 years, subject to regulatory approvals.
DROPPED
Peptide Capacity Commercialization in 12-14 Months
Solid-phase peptide synthesis capacity is expected to commercialize within 12-14 months, subject to regulatory approvals and customer timelines.
NEW RISK
Regulatory delays for CS projects
Commercialization of three major CS projects depends on EU/US regulatory approvals, which could face delays.
NEW RISK
Margin impact from product mix shift
Despite higher CS mix, overall margins have remained stable, suggesting limited upside from mix improvement due to generic pricing pressure.
NEW RISK
Confidentiality limits visibility on new projects
Management declined to provide details on peptide capacity, margins, or specific project timelines, creating uncertainty for investors.
RISK GONE
Geopolitical and Tariff Uncertainty
Analysts raised concerns about U.S. tariffs and geopolitical disruptions (Red Sea) affecting logistics and costs; management noted lack of clarity and long-term contracts as mitigants.
RISK GONE
Regulatory Approval Timelines for New Capacities
Commercialization of Kakinada Unit 3 and peptide capacity depends on regulatory approvals, which could take 1-2 years, delaying revenue contribution.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q2 FY25, Q3 FY25, Q4 FY25
Extended lead times of 2-3 weeks due to Red Sea rerouting are increasing freight costs and complicating supply chain planning.
Mentioned in Q1 FY25, Q2 FY25
Total capital expenditure for FY25, including Kakinada, is expected to be around INR 1,600 crores, with INR 1,000 crores remaining to be spent.
Mentioned in Q1 FY25, Q3 FY25
Ongoing price erosion in generics continues to pressure revenue growth despite volume increases.
Fast read
Guidance and risk preview
Management confirmed that FY26 CapEx will be higher than the earlier guidance of INR 2,000 crore, driven by three new projects with long-term suppl...
Management acknowledged ongoing pricing pressure in generics with no improvement expected in the next two quarters, potentially impacting margins.
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