Company Introduction
Headquarters Location: Hyderabad, India
Core Business Summary: Divi's Laboratories is a pharmaceutical company that manufactures and sells active pharmaceutical ingredients (APIs) and intermediates.
Overview
₹ 6,116
70.38
87
₹ 162,381 Cr
Company Overview
Industry Sector: Pharmaceuticals
Industry Trends
Industry Growth Next 5 Years: 8-10% CAGR
Key Demand Drivers: Increasing demand for generic medicines, growing healthcare expenditure, and rising prevalence of chronic diseases
Last 5 Year Cagr Industry Growth: 12.1%
Major Competitors: Dr. Reddy's Laboratories, Sun Pharmaceutical Industries, and Lupin Limited
Financials
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 3,776 | 4,064 | 3,891 | 4,946 | 5,394 | 6,969 | 8,960 | 7,767 | 7,845 | 9,360 |
| YoY % | +7.6% | -4.3% | +27.1% | +9.1% | +29.2% | +28.6% | -13.3% | +1.0% | +19.3% | |
| EBITDA | 1,541 | 1,573 | 1,411 | 2,043 | 2,012 | 3,123 | 4,197 | 2,713 | 2,588 | 3,375 |
| YoY % | +2.1% | -10.3% | +44.8% | -1.5% | +55.2% | +34.4% | -35.4% | -4.6% | +30.4% | |
| Net Profit | 1,126 | 1,060 | 877 | 1,353 | 1,377 | 1,984 | 2,960 | 1,824 | 1,600 | 2,191 |
| YoY % | -5.9% | -17.3% | +54.3% | +1.8% | +44.1% | +49.2% | -38.4% | -12.3% | +36.9% | |
| EPS | 42.41 | 39.95 | 33.04 | 50.96 | 51.85 | 74.75 | 111.52 | 68.71 | 60.27 | 82.53 |
| YoY % | -5.8% | -17.3% | +54.2% | +1.7% | +44.2% | +49.2% | -38.4% | -12.3% | +36.9% |
Growth Drivers
Historical Growth Drivers: Capacity expansion, product innovation, and strategic partnerships
Future Growth Drivers: Growing demand for APIs, increasing adoption of contract manufacturing, and expansion into new markets
Examples: Divi's Laboratories has expanded its capacity by 25% in the last 2 years, and has partnered with global pharmaceutical companies to develop new APIs
Market Position
Competitive Position: Leader in the Indian API market
Estimated Market Share: 10-12%
Technological Moat: Divi's Laboratories has a strong research and development team, and has invested heavily in technology to improve efficiency and quality
Strengths
- Strong research and development capabilities
- Diversified product portfolio
- Global customer base
- Robust financials
Weaknesses
- Dependence on few large customers
- Regulatory risks
- Competition from other API manufacturers
- Currency fluctuations
Valuations
Valuations for DIVISLAB
| Formula | Bull | Base | Bear | Margin of Safety |
|---|---|---|---|---|
| Ben Graham | ₹ 1,557 | ₹ 1,557 | ₹ 574 | -292.9% |
| Peter Lynch | – | ₹ 825 | – | -641.1% |
Rule of thumb (Lynch):
PEG ≈ 1 → Fairly valued
PEG < 1 → Undervalued (growth cheap relative to earnings)
PEG > 1.5 → Overvalued
Outlook
Forward Looking Analysis: Divi's Laboratories is well-positioned to benefit from the growing demand for APIs and intermediates, driven by the increasing demand for generic medicines and growing healthcare expenditure. However, the company faces risks from regulatory changes, competition, and currency fluctuations. Over the next 3-5 years, we expect Divi's Laboratories to continue to grow its revenue and profitability, driven by its strong research and development capabilities, diversified product portfolio, and global customer base.
Stock Price Performance
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Price | 1,008.55 | 627.30 | 1,090.35 | 1,723.30 | 1,877.00 | 3,616.10 | 4,379.70 | 2,874.70 | 3,567.95 | 5,549.70 |
| YoY % | -37.8% | +73.8% | +58.1% | +8.9% | +92.7% | +21.1% | -34.4% | +24.1% | +55.5% |
Stock 3 Year Rolling CAGR
| Metric | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Average |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 1.01% | 6.77% | 11.50% | 12.11% | 18.43% | 3.68% | -4.33% | 6.42% | 6.95% |
| EBITDA | -2.90% | 9.11% | 12.56% | 15.20% | 27.77% | -4.58% | -14.88% | 7.55% | 6.23% |
| Net Profit | -7.99% | 8.48% | 16.23% | 13.61% | 29.06% | -2.76% | -18.54% | 6.30% | 5.55% |
| EPS | -7.99% | 8.45% | 16.21% | 13.62% | 29.08% | -2.77% | -18.55% | 6.30% | 5.54% |
| Price | 2.63% | 40.05% | 19.85% | 28.02% | 32.64% | -7.36% | -6.60% | 24.52% | 16.72% |
