Divi’s Laboratories Hits 52-Week High After Strong Q2 Earnings

Shares of Divi’s Laboratories surged to a 52-week high of ₹11,824 on the National Stock Exchange (NSE) on Monday morning, following the release of the company's financial results for the second quarter. The stock later traded around ₹11,460, registering an increase of 3.27 per cent or ₹363 by late morning. The trading session saw over 18.33 lakh shares change hands, resulting in a traded value of ₹2,124 crore within the first two hours of trade. Year-to-date, the stock has delivered a return of over 80 per cent, bringing the company's market capitalisation to approximately ₹3.04 lakh crore.

The company reported consolidated revenue of ₹3,676 crore for the September quarter, marking a 35.4 per cent increase compared to the same period the previous year. Profit After Tax (PAT) saw a larger jump of over 63 per cent to stand at ₹1,127 crore. Custom synthesis emerged as the primary growth driver, accounting for 62 per cent of total revenue during the quarter.

The market response to the earnings report drew varied reactions from institutional brokerages. Goldman Sachs maintained a 'Buy' rating on the stock with a target of ₹11,700, noting that revenue and EBITDA exceeded its estimates by 21 per cent and 38 per cent, respectively. The brokerage attributed the outperformance to custom synthesis growing 54 per cent year-on-year, leading to upward revisions of up to 17 per cent in its EPS estimates for FY27 to FY29.

JPMorgan maintained an 'Overweight' rating and raised its price target to ₹12,500. The firm highlighted ongoing pipeline conversions from validation to commercialisation across three dedicated capital expenditure programs, alongside the company's stated goal to rank among the top three integrated global players in peptide synthesis. JPMorgan raised its earnings forecasts for FY27–29 by 18 to 30 per cent. Choice Institutional Equities also maintained an 'ADD' call with a street-high target of ₹12,650.

Meanwhile, Motilal Oswal retained a 'Neutral' rating with a target of ₹11,110 after raising its estimates by 21 per cent, pointing to limited upside at current valuations trading at 65 times forward earnings.

A notable contrarian perspective came from Elara Securities, which reiterated a 'Sell' rating with a target price of ₹6,539, representing a 43 per cent downside from Monday's trading levels. Elara questioned the durability of the company's EBITDA margins, which stood at 42.6 per cent—above historical ranges seen outside the COVID-19 pandemic period—and noted that management did not provide clear visibility regarding the sustainability of these margin levels.

"Divi's Laboratories' recent Q2 performance highlights how robust growth in custom synthesis can significantly impact market valuation and drive strong investor confidence. However, the divergence among brokerages—ranging from aggressive upgrades to cautious 'Sell' calls due to high valuations and margin sustainability—demonstrates the importance of looking beyond headline numbers. For growing enterprises, balancing rapid revenue expansion with clear long-term visibility on profitability metrics remains critical to sustaining investor trust in fluctuating market conditions." — Dr. Shishir Gupta, Founder & CEO, StartupLanes