Divi's Laboratories Shares Hit Record High on 64% Q2 Profit Surge

Shares of Divi's Laboratories rallied over 6% on Monday to touch a fresh 52-week peak after gaining more than 8% during Sunday's special Muhurat Trading session. According to financial reports released by the pharmaceutical manufacturer, consolidated net profit surged nearly 64% year-on-year to Rs 1,127 crore for the second quarter of FY27. Operational revenue increased over 35% year-on-year to Rs 3,676 crore during the September quarter compared with the corresponding period of the previous year. The company reported a foreign exchange gain of Rs 24 crore during the quarter compared with Rs 63 crore recorded in the year-ago period. Strong second-quarter performance and upbeat brokerage commentary regarding custom synthesis and peptide manufacturing bolstered institutional investor sentiment.

Brokerage Outlook: Goldman Sachs and JPMorgan Raise Targets on Margin Beat

Divi's custom synthesis business emerged as the principal earnings driver, recording a 54% year-on-year expansion supported by supplies from validation batches. The active pharmaceutical ingredient generics business also expanded 12% year-on-year, driven by healthy shipment volumes despite persistent pricing pressures in select categories. Operating EBITDA margin expanded by 989 basis points year-on-year to reach 42.6%, reflecting favorable product mix and backward integration benefits at Unit 3. Brokerage firm Goldman Sachs maintained its Buy rating on the stock with a revised target price of Rs 11,700 per share. JPMorgan maintained an Overweight rating, raising its price target to Rs 12,500 after revenue and EBITDA beat consensus estimates by 15% and 33% respectively. In Q2 FY27, Divi's Laboratories reported that consolidated EBITDA rose 76% year-on-year to ₹1,566 crore, expanding its operating margin to 42.6% from 32.7% in Q2 FY26, according to Kotak Neo.

Multi-Tonne Peptide Expansion and Valuation Perspectives

JPMorgan noted that Divi's is adding multi-tonne capacity through multiple 3,000-litre solid-phase peptide synthesis reactors to target a top-three global integrated peptide ranking. Nuvama Institutional Equities maintained its Buy rating, raising its target price to Rs 12,000 based on promising scale-up opportunities in innovation-led peptides. Nuvama highlighted that the installation of 3,000-litre solid-phase peptide synthesis lines positions the drugmaker for meaningful commercial scaling over the next two to three years. Several peptide fragments are currently undergoing validation or customer qualification, strengthening long-term revenue visibility across custom manufacturing contracts.

Motilal Oswal raised its earnings estimates by 21% for FY27 and 19% for FY28, projecting a 33% profit after tax compound annual growth rate over FY26 to FY28. On the Bombay Stock Exchange, Divi's Laboratories shares opened at Rs 11,105 apiece, touching an intraday high of Rs 11,818 per share before establishing an intraday low of Rs 11,066.15 per share. The stock has advanced 84% year-to-date in 2026, driven by persistent buying following strong earnings and capacity additions. Technical analysts noted an immediate resistance level near Rs 11,800, with trailing support positioned around Rs 11,200 after a continuation breakout. The drugmaker's expanding peptide manufacturing infrastructure and custom synthesis pipeline position it to capture long-term global pharmaceutical outsourcing demand.