2 days ago
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Even after reporting a healthy financial performance in Q1 FY26, Divi’s Laboratories is facing cautious ratings from global brokerage analysts.
The Hyderabad-based largecap drug maker reported a consolidated net profit of Rs 545 crore during the quarter, marking a 27 per cent year-on-year (YoY) jump. Revenue from operations also rose 13.8 per cent YoY to Rs 2,410 crore. Its total income for the quarter stood at Rs 2,529 crore, compared to Rs 2,197 crore in Q1 FY25.
Despite the growth in profit, analysts at brokerages – Jefferies, Goldman Sachs, HSBC, and Morgan Stanley – have shown mixed reactions to Divi’s Q1 performance, citing concerns over near-term business visibility. Here is what they suggested:
Jefferies has maintained a ‘hold’ rating on the stock but raised its target price to Rs 6,750. The brokerage flagged that Divi’s missed expectations in Q1 and highlighted that API growth remains weak. It also noted that the Custom Synthesis business faces near-term uncertainty, while FY26 is expected to be a heavy capital expenditure year, which could weigh on margins.
Similarly, Goldman Sachs remained cautious, maintaining a ‘neutral’ stance and cutting its target price to Rs 6,075. The firm cited ongoing headwinds and execution risks in Divi’s key growth segments as reasons for the downward revision. HSBC, on the other hand, retained its ‘buy’ call, trimming its price target to Rs 7,700.
Morgan Stanley is also positive on the stock and maintained an ‘overweight’ rating, though it revised its target price down to Rs 7,024. The brokerage acknowledged the company’s strong market positioning but flagged soft near-term growth visibility as a concern.
(This story will be updated shortly.)
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