Citi has reaffirmed its ‘Buy’ rating on Divi’s Laboratories, maintaining it as a top pick with a target price of Rs 6850, following a robust Q3 performance. The company reported a 25% YoY growth in revenues and a 52% YoY surge in EBITDA, driven by strong momentum across all its business segments.
Divi’s remains upbeat about its prospects in the GLP-1 peptide, generics (Gx), and contrast media markets. The company is working with multiple MNC customers in the GLP-1 space, leveraging its backward integration and capabilities in both SPPS (Solid Phase Peptide Synthesis) and LPPS (Liquid Phase Peptide Synthesis). The custom synthesis segment is also showing promise, with several products in various development stages and an increase in RFPs (requests for proposals) and customer audits. Furthermore, Divi’s is collaborating with nearly all major innovators in the contrast media sector, expanding its product pipeline in this high-growth area.
In the generics space, Divi’s notes that the pricing environment is stabilizing, and its pipeline remains strong. The company is conservatively targeting double-digit growth across its operations. Citi emphasizes that Divi’s diversified portfolio and leadership in complex molecules position it well for sustained growth. Additionally, the company’s focus on new technologies like oligonucleotides further strengthens its long-term prospects.
