Mar'25 View on Divis Laboratories Ltd

Divis Laboratories Ltd manufactures and exports API's, Intermediates and Nutraceutical ingredients. The stock had made a high of 6,200 and taken fallen to 200EMA to take support and now looks to scale back and touch 6,500 on back of following inputs. • Strong 52% yoy EBITDA growth was led by custom synthesis (CSM) sales. • There were some signs of green shoots in generic APIs (+8.4% yoy) as well. • Bake in a recovery in generics, driving a 26% overall FY25- 27E EPS CAGR. • Q3FY25 EBITDA margin at 32% rose 140 bps qoq, aided by higher gross margins. • Divi’s Q3FY25 EBITDA was largely in line with our estimates. • We expect earnings to grow by 24.1% in FY26E & grow by 28.4% in FY27E.