Divi's Labs Q2 net profit rises 35%; shares fall 3%, snap six-session winning streak amid profit booking

Divi's Labs Q2 net profit rises 35%; shares fall 3%, snap six-session winning streak amid profit booking

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26 Aug, 2025 12:21

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Divi's Labs shares saw profit booking on November 7 even as the company's second-quarter profit was above analysts' estimates.

At 1:45 pm on November 7, Divi's Labs shares on NSE were trading 3% lower at Rs 6,661 apiece, thus snapping their six-session winning streak during which the shares rose 7%.

The company's consolidated net profit rose to Rs 689 crore in the quarter ended September 30 from Rs 510 crore a year earlier, the Hyderabad-based company said.

That was above analysts' average estimate of Rs 587 crore, according to data compiled by LSEG.

Revenue from operations rose 16% to Rs 2,115 crore, compared with analysts' estimates of Rs 2,486 crore.

"Divi's Q2 results show strong performance, however, the stock correction we see is after the gains that it has seen over the past few sessions, so some profit booking is expected," said Shrikant Akolkar, an analyst with Nuvama.

The company's total expenses rose nearly 13% on year and 9% sequentially to Rs 1,886 crore. Its raw material cost, which accounts for 48% of its overall expenditure, fell 5% on year to Rs 907 crore. Other expenses rose nearly 15% on year to Rs 370 crore. Employee benefits expense rose a little over 16% to Rs 344 crore. Depreciation and amortisation expenses were up 15% on year at Rs 113 crore.

The company's net profit for the half year ended September rose 32% on year to Rs 1,253 crore. Its revenue from operations for the period rose 15% on year to Rs 5,017 crore.

Divi's, one of India's largest manufacturers of active pharmaceutical ingredients (API), exports to more than 100 countries and counts the United States and Europe as its top markets.

APIs are key chemical components in a drug that produce the intended therapeutic effects.

Divi's is also set to benefit from diabetes and weight-loss drugs manufacturers such as Eli Lilly as demand for these drugs soar in global markets.

So far in 2025, Divi's Labs shares rose 11% as against 5% decline in pharma index.

With inputs from Reuters