Divi's Lab Q2 results: Net profit down 29% to Rs 348 crore, misses estimates

A high base of the previous fiscal weighed on Divi's Q2 earnings.

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26 Aug, 2025 12:21

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Pharma major Divi's Laboratories on November 6 reported a 29.50 percent year-on-year (YoY) decline in its consolidated net profit to Rs 348 crore for the July-September quarter of the current financial year, missing estimates.

The company reported a profit of Rs 493.60 crore in the same period last year. The weak profit growth can be accounted to a higher base due to the stellar contribution from the COVID-19 drug Molnupiravir in the same period of the last fiscal.

Revenue came in at Rs 1,909 crore up merely 3 percent from the year-ago quarter numbers of Rs 1,855 crore. A poll of eight brokerages collated by Moneycontrol had pegged net profit at Rs 423 crore and revenue at Rs 1,913.2 crore.

Aside from an unfavourable base, analysts had also anticipated softening of overall active pharmaceutical ingredients (API) prices to weigh on the company's Q2 results.

Operational performance also remained weak as the company's earnings before interest, taxes, depreciation and amortization (EBITDA) came in at Rs 479 crore, down around 23 percent from Rs 621 crore clocked in the year-ago period due to higher other expenses and lower currency gains. The EBITDA margin also contracted sharply to 25.1 percent against 33.5 percent in the base period.

The compny's EPS (earnings-per-stock) stands at 13.11 as against 18.60 in the year-ago period.

The management appeared optimistic in terms of its opportunities in its earnings call. Its two big custom synthesis projects have now gone full scale now.

The management said that it sees an opportunity in complex amino acid products, as it is the only player outside of China. They said that they are the most backward integrated company. They added that volume trends in generic APIs is strong, but pricing pressure is keeping revenues muted.

Shares of the drugmaker also reacted negatively to its earnings announcement as they were trading 1.3 lower at Rs 3,308.95 on the NSE as of 1.02 pm. Shares of Divi's Labs have dropped 11.5 percent in the past three months over the company's consistently weak performance.