This article first appeared on GuruFocus .
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Consolidated Total Income (Q2 FY26):INR 2,860 crore, a 17% increase from INR 2,444 crore in Q2 FY25.
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Profit Before Tax (Q2 FY26):INR 912 crore compared to INR 722 crore in Q2 FY25.
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Profit After Tax (Q2 FY26):INR 689 crore as against INR 510 crore in Q2 FY25.
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Material Consumption (Q2 FY26):39.5% of sales revenue.
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Exports (Q2 FY26):90% of total sales revenue, with Europe and the United States contributing 74% combined.
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Product Mix (Q2 FY26):44% generics and 56% custom synthesis.
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ForEx Gain (Q2 FY26):INR 63 crore.
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Revenue Growth (Constant Currency, Q2 FY26):10.9%.
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Nutraceutical Business Revenue (Q2 FY26):INR 142 crore.
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Consolidated Total Income (H1 FY26):INR 5,389 crore, a 16% increase from INR 4,640 crore in H1 FY25.
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Material Consumption (H1 FY26):39.6% of sales revenue.
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Profit Before Tax (H1 FY26):INR 1,645 crore compared to INR 1,326 crore in H1 FY25.
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Profit After Tax (H1 FY26):INR 1,234 crore.
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Exports (H1 FY26):90% of total sales revenue, with Europe and the United States contributing 73% combined.
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Product Mix (H1 FY26):45% generics and 55% custom synthesis.
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ForEx Gain (H1 FY26):INR 102 crore.
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Revenue Growth (Constant Currency, H1 FY26):12.3%.
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Nutraceutical Business Revenue (H1 FY26):INR 492 crore.
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Capitalized Assets (H1 FY26):INR 463 crore, with INR 201 crore capitalized in Q2.
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Capital Work in Progress (as of September 30, 2025):INR 2,030 crore.
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Cash on Book (as of September 30, 2025):INR 3,261 crore.
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Receivables (as of September 30, 2025):INR 2,614 crore.
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Inventories (as of September 30, 2025):INR 3,433 crore.
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Warning! GuruFocus has detected 7 Warning Signs with BOM:532488.
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Release Date: November 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Divi's Laboratories Ltd ( BOM:532488 ) reported a 17% increase in consolidated total income for Q2 FY26, reaching INR2,860 crore compared to INR2,444 crore in the same quarter of the previous year.
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The company achieved a profit before tax of INR912 crore, up from INR722 crore in Q2 FY25, and a profit after tax of INR689 crore, compared to INR510 crore in the previous year.
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Exports accounted for 90% of total sales revenue, with Europe and the United States contributing a combined 74%, showcasing strong international demand.
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The custom synthesis segment showed significant growth, with a product mix of 56% custom synthesis and 44% generics, indicating a strategic shift towards higher-margin offerings.
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Divi's Laboratories Ltd ( BOM:532488 ) is actively investing in new technologies and expanding capacities, with three major CapEx programs backed by long-term supply commitments, positioning the company for future growth.
Negative Points
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The generic segment continues to face pricing pressures, resulting in a low single-digit decline in performance despite stable volumes.
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There is uncertainty regarding the duration of pricing pressures in the generic business, with no clear timeline for stabilization.
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The company is experiencing ongoing shifts in trade patterns and geopolitical developments, which could affect supply chain stability.
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Despite significant investments, the timeline for revenue realization from new projects remains uncertain, with expectations set for the next one to two years.
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The company faces challenges in maintaining margins due to the mix of generics and custom synthesis, with generics experiencing significant pricing pressures.
Q & A Highlights
Q: Can you provide guidance on the impact of patent expirations in the US and EU on custom synthesis volumes? A: Kiran Divi, CEO, stated that he cannot comment on specific products or customer impacts due to confidentiality agreements.
Q: When can we expect a revival in the generic API business given the current pricing pressures? A: Kiran Divi, CEO, mentioned that while there is pricing pressure, they have not lost any customers or volumes. The company hopes for stabilization in the next few quarters.
Q: With the increase in RFPs for custom synthesis, does Divi's have a competitive edge in pricing due to available capacity? A: Kiran Divi, CEO, explained that Divi's has a long-term customer relationship and proven track record, which gives them an edge. Pricing is just one of many factors considered by multinationals.
Q: Is there an increase in CapEx guidance for FY26 given the current spend? A: Nilima Motaparti, Full-Time Director, confirmed that CapEx for FY26 will be higher than initially guided due to new projects and ongoing capacity expansions.
Q: What is the outlook for Divi's peptide manufacturing capabilities and investments? A: Kiran Divi, CEO, stated that Divi's has been in peptide manufacturing for 20 years and is focusing on developing several molecules for customers. They have opened a center of excellence for peptides.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
