Divi's Laboratories — Q4 FY25
Divis Laboratories reported a strong Q4 FY25 with PAT of INR 662 crore, up 23% YoY, driven by robust custom synthesis momentum and stable generic volumes despite pricing headwinds.
bullish
medium
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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.
38%Questions answered5Evaded / deflected12Questions audited
Evasive
High priority
What drove generic business growth and margin improvement?
Asked by Surya Narayan Patra, Philip Capital (India) Private Limited
Did not explain what drove the growth or margin improvement; gave generic statement about competition.
did not attribute growth to price or mixgeneric answer about competition
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Question
how should we see this, the generic growth, whether it has been driven by the price rise or what, and whether that has contributed to the overall margin scenario here?
Kiran S. Divi, CEO
right now, the generic performance itself is at a high competition level, whereby we have continuous pricing pressure in the generic side. As market share continues, we are still a dominant player in the market, and we continue to play that role in terms of new molecules that are coming off patent.
Partial answer
High priority
Is the margin improvement sustainable or just product mix?
Asked by Surya Narayan Patra, Philip Capital (India) Private Limited
Attributed to product mix but gave no specifics on sustainability or outlook.
no forward guidance on margins
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Question
How should one think going ahead? Is it just a quarter-specific product mix that is driving this number, or how should one think going ahead to think about the margin scenario?
Nilima Prasad Divi, Whole Time Director Commercial
This is mainly to do with the product mix that we have, and it will keep changing quarter on quarter. I would recommend looking at it on a yearly basis rather than just focusing on one quarter.
Partial answer
High priority
Any change in RFQs or customer engagement due to Biosecure Act?
Asked by Surya Narayan Patra, Philip Capital (India) Private Limited
Acknowledged increase but gave no specifics or outlook; cited confidentiality.
no quantification of RFQ increasecited confidentiality
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Question
Any practical change in terms of your RFQs or the customer engagement, although you have indicated there is a heightened engagement that is still there? Since we are completing the financial year, any commentary that you can provide for the next year in terms of your outlook or guidance or anything on that front?
Kiran S. Divi, CEO
With the Biosecure Act or China Plus One, we are seeing a little more than what we have seen before. We have several products in the pipeline. Some are going through R&D phases. Some are in pilot fields right now. It's hard for us to put a finger on it because of confidentiality.
Partial answer
High priority
Is Kakinada backward integration already helping gross margins?
Asked by Neha Manpuria, Bank of America
Confirmed benefits are coming but did not quantify impact on margins or timeline.
no quantification of margin impact
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Question
has the backward integration from Kakinada started already helping gross margins, or would that take time to reflect, and that's something that we should build in going forward?
Kiran S. Divi, CEO
Kakinada, definitely, we started in January, the production, and the backward integrated material has slowly come into the product. We will see the benefits going in the future as phase I, and slowly we will start constructing phase II where we will add additional blocks.
Evasive
Medium priority
When will Kakinada become EBITDA neutral?
Asked by Neha Manpuria, Bank of America
Did not answer the timeline question; redirected to look at the whole company.
reframed the questionno timeline given
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Question
would it be fair to assume that it will take a couple of quarters for Kakinada to become like an EBITDA neutral from a cost versus the benefits from Kakinada? Would that be right way to look at it?
Kiran S. Divi, CEO
I would rather, instead of rather looking at Kakinada as a single unit, because see, the raw material, the starting material is producing, goes straightly into one of the units where GMP is being produced, material is being produced. We have to look at the molecule as a whole.
Evasive
Medium priority
Peptide capabilities beyond GLP-1 and other modalities?
Asked by Neha Manpuria, Bank of America
Did not confirm capabilities outside GLP-1; cited confidentiality for details.
cited confidentialityno specifics on non-GLP-1 peptides or ADCs
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Question
First, on peptides, do we have capabilities that extend outside of GLP? Are they extending even to non-GLP areas? Also, what about, are we focusing on ABCs or even nucleotides?
Kiran S. Divi, CEO
I cannot comment more on these because I am bound by confidentiality, so I can only talk about that we are working with several customers and at several phases right now. Divi's has actively invested in both solid phase and liquid phase so that we can, as and when required, support customer requirements.
Evasive
High priority
Impact of pharma reshoring on Divi's growth?
Asked by Dr. Kunal Dhamesha, Macquarie Group
Did not address reshoring impact; gave generic statement about opportunities.
no specific impact assessmentvague reassurance
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Question
Several of the large pharma companies in the U.S. have announced large capital expenditures to kind of reshore the manufacturing. How are you viewing this announcement in context of the overall industry growth rate? Specifically, do you think any read across for Divi's since we kind of work with all these large pharma companies?
Kiran S. Divi, CEO
We are seeing new opportunities in the pipeline. We do not see any issues at this point, but if something arises, of course, we will definitely know. As of now, we do not see anything.
Answered
Medium priority
GLP-1 portfolio includes non-peptide small molecules?
Asked by Dr. Kunal Dhamesha, Macquarie Group
Confirmed involvement in small molecule GLP-1s and other analogs.
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Question
would you say that that portfolio would extend beyond peptide GLP-1s? We would have some non-peptide or maybe small molecule GLP-1s also in the portfolio.
Kiran S. Divi, CEO
Divi's is working on GLP-1s, GIPs, GLP-2 analogs, and on small molecules. We are very active with different customers at different phases.
Partial answer
Medium priority
Compare the two large long-term supply agreements?
Asked by Shyam Srinivasan, Goldman Sachs
Gave basic distinction but no comparison of size or terms; cited confidentiality.
no further details due to confidentiality
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Question
But that's a long-term supply agreement. This is, again, a long-term supply agreement. Can we just compare and contrast? I know you're not going to call out the names, but just want to understand why not API in this one.
Kiran S. Divi, CEO
both are related to CS projects. Yes, the recent one is an advanced intermediate. The one before, all I can say is it is an active API.
Evasive
High priority
What drove other expenses down as % of sales?
Asked by Shyam Srinivasan, Goldman Sachs
Gave vague reasons and seemed confused; did not explain the decline.
no clear explanationcontradicted by analyst (costs went down, not up)
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Question
Other expenses as a percentage of sales last year was 17%, and this year was 14%. This is despite we having 18% constant currency growth. Just want to understand what is driving this operating leverage.
Nilima Prasad Divi, Whole Time Director Commercial
I would say the major drive behind it could be quite a few things. It's not just one thing that has led to the other expenses being the major. It could be mainly from the point of view of the raw material expenses.
Partial answer
High priority
Revenue and EBITDA guidance for FY26?
Asked by Shyam Srinivasan, Goldman Sachs
Gave only qualitative double-digit growth guidance; no EBITDA guidance.
no specific numberonly qualitative double-digit growth
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Question
any guidance for the revenue and EBITDA for fiscal 2026?
Nilima Prasad Divi, Whole Time Director Commercial
The revenue guidance, I would say, as I have said earlier, we would always look at double-digit growth, and we would always assume, and our work would always be towards making sure the organization grows at a consistent pace of double-digit growth.
Answered
High priority
Will Divi's participate in generic semaglutide opportunity?
Asked by Amir, JM Financial
Clearly stated no participation in generic GLP-1s.
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Question
The next year, which we generally have opportunity in the semag local, which is opening up, are we not going to participate in that opportunity?
Kiran S. Divi, CEO
As of now, we are not looking at working with GLP-1s at the generic space.