Divi's Laboratories Limited (DIVISLAB) AI Stock Analysis

• Market Cap: ₹1.71T
• Dividend Yield: 0.47%
• Average Volume (3M): 6.45K
• Price to Earnings (P/E): 68.7
• Beta (1Y): 0.98
• Revenue Growth: 16.43%
• EPS Growth: 35.35%
• Country: IN
• Employees: 9,741
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 25.97
• Shares Outstanding: 265,468,570
• 10 Day Avg. Volume: 2,471
• 30 Day Avg. Volume: 6,452
• PEG Ratio: 1.82
• Price to Book (P/B): 9.84
• Price to Sales (P/S): 15.74
• P/FCF Ratio: 290.01
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹6,866.67
• Price Target Upside: 3.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 97.87
• Revenue Forecast (FY): ₹106.85B

• Rating: 74 Outperform
• Price Target: ₹7,559.00 ▲(14.48% Upside)

Divi's Laboratories Limited has a strong financial foundation with impressive profitability and minimal leverage, which is the most significant factor in its score. The technical analysis indicates strong momentum but warns of potential overbought conditions. The high P/E ratio suggests overvaluation, which is a concern for valuation-focused investors.

Positive Factors

Strong Profitability

The consistent improvement in net profit margin indicates effective cost management and pricing strategy, enhancing long-term profitability.

Minimal Leverage

Minimal leverage enhances financial stability and flexibility, allowing the company to invest in growth opportunities without excessive risk.

Revenue Growth

Positive revenue growth reflects the company's ability to expand its market presence and product demand, supporting long-term business expansion.

Negative Factors

Volatile Free Cash Flow

Volatile free cash flow can indicate potential instability in cash generation, which may affect the company's ability to fund operations and growth consistently.

Decreasing Gross Profit Margin

A declining gross profit margin suggests rising costs or pricing pressures, which could erode profitability if not addressed.

Moderate Free Cash Flow to Net Income Ratio

A moderate conversion of income to cash indicates potential inefficiencies in cash management, which could impact liquidity and investment capacity.

Divi's Laboratories Limited Business Overview & Revenue Model

Company Description

Divi's Laboratories Limited manufactures and sells generic active pharmaceutical ingredients (APIs) and intermediates, and nutraceutical ingredients in India, the United States, Asia, Europe, and internationally. It also undertakes custom synthesis of APIs and intermediates; and supplies a range of carotenoids, as well as markets vitamins to nutritional, pharma, food/beverage, and feed industries. The company was formerly known as Divi's Research Center and changed its name to Divi's Laboratories Limited in 1994. The company was incorporated in 1990 and is headquartered in Hyderabad, India.

How the Company Makes Money

Divi's Laboratories generates revenue primarily through the production and sale of APIs and pharmaceutical intermediates. The company operates on a business model that includes both contract manufacturing and direct sales, allowing it to serve a diverse clientele, including multinational pharmaceutical companies. Key revenue streams are derived from the supply of APIs for various therapeutic areas, as well as custom synthesis services offered to clients. Additionally, strategic partnerships with global pharmaceutical firms and a robust export market contribute significantly to its earnings. The company's focus on research and development ensures a steady pipeline of innovative products, further enhancing its revenue potential.

Divi's Laboratories Limited Financial Statement Overview

Summary

Divi's Laboratories Limited demonstrates robust financial health with strong profitability, minimal leverage, and efficient operations. The income statement and balance sheet are impressive, but the cash flow statement reveals some volatility in free cash flow growth, which could pose a risk if not managed carefully.

Income Statement

Divi's Laboratories Limited shows strong profitability with a consistent increase in net profit margin from 20.4% to 23.4% over the years. The gross profit margin remains robust, though it has slightly decreased from 66.3% to 34.1% in recent years. Revenue growth is positive at 3.1% for the latest period, indicating a stable upward trajectory. EBIT and EBITDA margins are healthy, reflecting efficient operations.

Balance Sheet

The company maintains an excellent balance sheet with a very low debt-to-equity ratio, indicating minimal leverage risk. Return on equity is strong at 14.6%, showcasing effective use of shareholder funds. The equity ratio is high, suggesting a solid financial structure with significant equity backing the assets.

Cash Flow

Operating cash flow is strong, with a good coverage ratio of 1.34. Free cash flow growth is volatile, showing 'Infinity' due to a significant increase from the previous period, but this may indicate potential instability. The free cash flow to net income ratio is moderate, suggesting room for improvement in converting income to cash.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	96.52B	93.58B	77.96B	77.49B	87.99B	68.58B
Gross Profit	53.72B	31.91B	45.27B	44.87B	57.07B	45.34B
EBITDA	34.67B	33.21B	25.43B	27.14B	39.97B	29.24B
Net Income	23.06B	21.91B	16.00B	18.24B	29.60B	19.84B
Balance Sheet
Total Assets	0.00	169.47B	154.70B	144.39B	133.75B	107.74B
Cash, Cash Equivalents and Short-Term Investments	35.27B	37.15B	37.01B	41.36B	27.42B	20.85B
Total Debt	0.00	40.00M	30.00M	44.90M	36.90M	48.30M
Total Liabilities	-149.69B	19.78B	18.99B	16.72B	16.47B	14.79B
Stockholders Equity	149.69B	149.69B	135.71B	127.67B	117.28B	92.95B
Cash Flow
Free Cash Flow	0.00	5.08B	2.58B	19.86B	11.99B	10.37B
Operating Cash Flow	0.00	19.46B	12.61B	24.59B	19.12B	19.47B
Investing Cash Flow	0.00	-10.99B	-2.69B	-27.07B	-21.95B	751.30M
Financing Cash Flow	0.00	-7.97B	-7.99B	-7.97B	-5.32B	-348.90M

Divi's Laboratories Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6603.05
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:DIVISLAB, the sentiment is Negative. The current price of 6603.05 is above the 20-day moving average (MA) of 6418.89, above the 50-day MA of 6470.02, and above the 200-day MA of 6243.91, indicating a neutral trend. The MACD of -30.69 indicates Positive momentum. The RSI at 43.91 is Neutral, neither overbought nor oversold. The STOCH value of 54.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:DIVISLAB.

Divi's Laboratories Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DIVISLAB	74 Outperform	₹1.71T	68.66	―	0.47%	16.43%	35.35%
DRREDDY	74 Outperform	₹1.07T	18.21	―	0.62%	14.10%	9.72%
LUPIN	72 Outperform	₹965.64B	22.32	―	0.57%	15.49%	64.37%
TORNTPHARM	66 Neutral	₹1.28T	59.93	―	0.85%	9.11%	18.76%
LAURUSLABS	66 Neutral	₹547.87B	80.06	―	0.16%	25.83%	421.20%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Divi's Laboratories Limited Corporate Events

Divi’s Laboratories Releases Unaudited Financial Results for September 2025

Divi’s Laboratories Limited announced the publication of its unaudited financial results for the quarter and half-year ending September 30, 2025, in major newspapers. This disclosure aligns with regulatory requirements and provides stakeholders with insights into the company’s financial performance, potentially impacting investor confidence and market positioning.

Divi’s Laboratories Announces Trading Window Closure

Divi’s Laboratories Limited has announced the closure of its trading window starting October 1, 2025, in compliance with SEBI regulations to prevent insider trading. This closure will remain in effect until 48 hours after the company declares its unaudited financial results for the quarter and half-year ending September 30, 2025. The decision underscores the company’s commitment to regulatory compliance and transparency in its financial reporting, which is crucial for maintaining investor trust and industry credibility.