$DIVISLAB

The most striking aspect of Q1 FY27 was the dramatic margin expansion. Operating profit (PBDIT excluding other income) surged to ₹1,255.00 crores, translating to an operating margin of 40.75%—a substantial improvement from 32.99% in Q4 FY26 and 30.25% in Q1 FY26. This 776 basis points year-on-year margin expansion reflects multiple positive factors: improved product mix with higher contribution from complex molecules, better capacity utilisation, moderating raw material costs, and operational efficiencies from recent capital investments. Net profit margin expanded to 29.29% in Q1 FY27 from 22.61% a year ago, demonstrating strong operating leverage. The company maintained disciplined cost control, with employee costs at ₹408.00 crores representing just 13.25% of revenues despite inflationary pressures. Depreciation charges of ₹133.00 crores reflect ongoing capacity expansion investments, whilst the effective tax rate of 23.56% remained within the company's normalised range.