Divi’s Laboratories Q4 FY25 Results Reveal Margin Expansion

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Divi’s Laboratories Posts Robust Q4 FY25 Results, Signals Strong Growth Momentum

By S Jha

MUMBAI, May 17, 2025 – Divi’s Laboratories Limited, a leading global API and custom synthesis pharmaceutical company, announced its Q4 FY25 and full-year financial results on Saturday. It showcased a stellar performance driven by its custom synthesis business and strategic capacity expansions.

Divi’s Laboratories Limited reported a 12.24% year-on-year (YoY) revenue increase to ₹2,585 crore. It also reported a 23.05% YoY surge in net profit to ₹662 crore for the quarter, exceeding market expectations.

According to the company’s press release, Q4 FY25 revenue stood at ₹2,585 crore, up from ₹2,303 crore in Q4 FY24, with EBITDA rising 21.16% YoY to ₹886 crore and an improved EBITDA margin of 34.27% (up 253 basis points from 31.74%).

The press release highlighted the operational commencement of the Unit III greenfield project at Ontimamidi Village, near Kakinada, Andhra Pradesh, as a key driver for future growth. The company also recommended a final dividend of ₹30 per share, reflecting confidence in its financial health.

Moneycontrol reported that Divi’s Q4 performance was bolstered by higher-than-anticipated revenue from its synthesis business. Analysts attributed sustained growth in FY25 due to new project ramp-ups and a ₹6.5-7 billion investment for capacity addition, set to be operational by January 2027.

Despite the strong results, some experts raised cautions. @Praveen12Pranis on X highlighted, “EBITDA: ₹972 Crs vs ₹810 Crs YoY up 20%,” but flagged potential headwinds from global pricing pressures.

Divi’s management, in the press release, expressed optimism about FY25, citing a robust pipeline in custom synthesis and new generic filings across regulated markets. The company’s strategic focus on complex peptides and contrast media, coupled with its expanded capacity, positions it to capitalize on emerging opportunities in the global pharmaceutical market.

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With a market cap of ₹93,065 crore as of March 2025 and a 28.5% stock rally over the past year, Divi’s Laboratories continues to solidify its position as a pharma powerhouse.

Investors await the earnings call on May 19, 2025, for further insights into the company’s growth strategy and execution plans. CompoundingAI in a post on X said: “Margins are back above pre-pressure levels despite a decade-long decline in EBITDA margins (from 37–38% to ~31% due to GMP costs, regulatory pressure, and pricing wars), Divi’s posted a 34.27% margin in Q4 FY25. That’s the highest margin since the Nitrosamine and logistics drag era began.”

The user claimed that the margin expansion signalled “product mix is tilting more toward custom Synthesis, internal sourcing (Kakinada), generic pricing pressure may have structurally eased for top players.” The company reported a ₹1,653 Cr in operating cash flow while being debt free with ₹1,653 crore in net cash from operations.”

(Disclaimer: This article makes no recommendation for buy or sell of shares of any company)

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