Divi's Laboratories — Q3 FY24
Divis Laboratories reported a steady Q3 FY24 with PAT of INR 358 crore on total income of INR 1,950 crore.
neutral
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.
58%Questions answered3Evaded / deflected12Questions auditedContradictedNumbers vs filing
Partial answer
High priority
Do Big Pharma companies want to reduce China exposure? When will this benefit Indian CDMOs?
Asked by Alankar Garude, Kotak Institutional Equities
Acknowledged opportunities but did not provide a specific timeline for translation into business.
no timeline givenvague on when benefits will materialize
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Question
in your discussions with CDMO customers, do you get the impression that Big Pharma companies are really looking to curb their exposure to China? ... By when do you think this would start translating into business for Indian CDMO companies like us?
Kiran S. Divi, Whole-Time Director and CEO
We are seeing a huge amount of growth and a lot of opportunities coming on our side, especially since there is a direction that the Big Pharma should work more with Indian companies and towards European companies.
Evasive
Medium priority
Can Boc or Fmoc protecting groups be used for Semaglutide/Tirzepatide?
Asked by Alankar Garude, Kotak Institutional Equities
Declined to comment on specific drugs, gave a general explanation about protecting groups.
refused to name drugsgeneric answer without specifics
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Question
within the peptide segment ... for Semaglutide, Tirzepatide, as well as the upcoming GLP-1 combinations, can either of these protecting groups be used?
Kiran S. Divi, Whole-Time Director and CEO
I cannot mention the name of the drugs, unfortunately, but what I can mention is, for any amino acid, to create a protected amino acid, you need either a Boc or an Fmoc.
Evasive
High priority
Is there an opportunity for Divi's in GLP-1 API or only building blocks?
Asked by Alankar Garude, Kotak Institutional Equities
Avoided answering whether they would enter GLP-1 API, only reiterated current building block focus.
refused to comment on drugsdid not address API opportunity
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Question
There are already multiple developers of Semaglutide API globally. Do you think there is an opportunity for us, even in the GLP-1 API space, or we would like to remain restricted to the building blocks for now?
Kiran S. Divi, Whole-Time Director and CEO
I cannot comment on the drugs again, but what I can say is we are active with the building blocks right now, and we are working with innovators very closely. We are also supplying dipeptide and tripeptide at this point, and we are under qualifications.
Partial answer
Medium priority
Is the increase in other expenses due to Red Sea situation? What incremental impact?
Asked by Surya Narayan Patra, PhillipCapital India Private Limited
Attributed partially to Red Sea but did not quantify the impact or give specific incremental numbers.
no quantification of current impactvague on incremental impact
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Question
on the other expenses front, there is a kind of impact that we are witnessing. Is it entirely because of this Red Sea situation or what is this impact that we are seeing? And what incremental impact that we can see going ahead in the subsequent quarter because of the Red Sea?
Nilima Prasad Divi, Whole-Time Director of Commercial
it's partially Red Sea and partially, also like, you know, because of the Red Sea, not just the logistics, but also, like, the insurance and all other factors kicking into it. ... going forward, we see this is going to highly impact the logistics cost, the supply chain cost, wherein we are seeing reports where they are saying it's going to be a 30% spike in the freight cost.
Partial answer
Medium priority
How many contrast media products launched/contracted? Is China competition?
Asked by Surya Narayan Patra, PhillipCapital India Private Limited
Mentioned specific products but did not give count of launched/contracted products or directly compare to China.
no specific number of productsdid not directly address China competition
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Question
how many products that we would have so far launched and contracted and just started supplying to with pharma? And how many product opportunities that we are targeting to capture further going ahead? And also, an extended question here is that whether it is China, which is a bigger competition so far as contrast media is concerned for Divi's.
Kiran S. Divi, Whole-Time Director and CEO
in terms of iodine-based compounds, okay, we are very strong in Iohexol and Iohexol. ... we are working with the innovators at this point, and we are under qualifications. ... we are also looking at few other generic molecules where the qualifications are going on.
Partial answer
Medium priority
What is the global contrast media market size and Divi's addressable portion?
Asked by Surya Narayan Patra, PhillipCapital India Private Limited
Provided market size but did not specify Divi's current capture or target portion.
did not quantify Divi's market share or addressable portion
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Question
globally, what is the current size of the global market in Contrast Media? And, by what, the number of products that we are currently already marketing, so what portion of the target market that we, we are addressing or capturing so far?
Kiran S. Divi, Whole-Time Director and CEO
Globally, the iodine-based contrast media is about $5 billion, and the gadolinium compound is about $4-$4.5 billion market share. So we are looking at. And most of it is controlled by the innovators.
Answered
High priority
What is the progress on peptides/proteins and when commercial opportunities?
Asked by Surya Narayan Patra, PhillipCapital India Private Limited
Provided clear status (under qualification) and timeline (2025) for commercial opportunities.
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Question
what is the practical progress of us on that front in terms of the development of the molecules or the products, as well as in terms of the manufacturing capability? And when that we can see the commercial opportunities really justifying for us?
Kiran S. Divi, Whole-Time Director and CEO
We are in the process of getting qualified with several customers, who basically customers are innovators, where they're using it for their molecule at their contract sites. We will see opportunities more towards 2025, since the qualification takes time.
Answered
High priority
What drove the QoQ improvement in custom synthesis to 46%? Future outlook?
Asked by Shyam Srinivasan, Goldman Sachs
Clearly attributed growth to commercialization of two big projects and indicated future scaling.
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Question
we've seen a very good, QOQ improvement in CS, right? It was 40% last quarter, now it's 46. So what's driven some of the growth in this, CS, segment? ... how should we look at custom synthesis contribution when we look forward?
Kiran S. Divi, Whole-Time Director and CEO
the two big custom synthesis projects have commercialized, and, you know, the results have, you know, we have started production, started supplies, and we will see much more benefits in the coming quarters as the volumes scale up and the shipments start.
Answered
High priority
Outlook for generic business given pricing pressure and patent expiries beyond 2025?
Asked by Shyam Srinivasan, Goldman Sachs
Provided specific market share gain (3-5%) and timeline for stability (2-3 quarters).
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Question
if you could kind of give us an outlook for the generic piece specifically, and also the elaboration on the comments you said that once the patents expire, we'll start seeing opportunities beyond 2025.
Kiran S. Divi, Whole-Time Director and CEO
in the generic is like a cycle. ... we have gained about 3%-5% of market share in most of our large volume products. ... We think maybe in the next 2-3 quarters, we will start seeing stability in the generic business.
Answered
High priority
Should we expect generic API business to remain at current level or improve?
Asked by Neha Manpuria, Bank of America
Confirmed market share gains and capacity increases, indicating growth rather than stagnation.
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Question
given pricing is weak and a lot of these new molecules are going to come in, you know, 25, we should expect the generic business, the generic API business, to remain at this level? Or are there drivers to see an improvement in the generic piece of sales, demand as we go forward?
Kiran S. Divi, Whole-Time Director and CEO
the generic business, in general, we have not lost any market share. In fact, we have gained market share in several of our large volume APIs. We have also increased capacity in several of our APIs. ... we believe that we will grow in generic.
Evasive
High priority
Can margins improve to pre-COVID levels? What is needed?
Asked by Neha Manpuria, Bank of America
Avoided direct comparison and did not address whether margins can return to pre-COVID levels.
refused to compare to pre-COVIDdid not answer if margins can improve to that level
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Question
Can this margin improve and go back to what we were at, you know, pre-COVID levels? And would that need a lot of this pipeline and, you know, GLP-1, et cetera, to kick in for that to happen?
Nilima Prasad Divi, Whole-Time Director of Commercial
comparing it to pre-COVID to now is not a similar scenario. What we can say, however, ex-COVID, the last nine months, if you compare to the last financial year's nine months, we did see a double-digit growth.
Answered
Medium priority
Does GLP-1 protected amino acids require subsequent CapEx for commercial benefit?
Asked by Tushar Manudhane, Motilal Oswal Financial Services
Clearly stated current capacity is sufficient for initial demand, with potential future CapEx if needed.
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Question
would this require subsequent, CapEx and when the commercial benefit, or we already have the capacity to gain the traction post-approval?
Kiran S. Divi, Whole-Time Director and CEO
As of now, we have enough capacity to take care of their initial requirements, what they have requested. If the volumes go beyond expected, ... then yes, we will have to invest and then build additional capacity.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Nutraceutical business revenue INR 153 crore this quarter | ₹153 cr | ₹1,855 cr | Understated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.