Divis Laboratories shares fall 4% after Q3 results; should you buy, sell or hold?

Divis Laboratories share price dropped by 4% in morning trade on the BSE on Thursday, February 12, a day after the company reported its December quarter results. Divis Laboratories shares opened at ₹6,473.20 against their previous close of ₹6,474.50 and dropped 4% to an intraday low of ₹6,210. Around 10:10 am, the pharma stock traded 2.85% lower at ₹6,290. Equity benchmark Sensex was 0.38% down at 83,909.66 at that time.

Divis Laboratories Q3 results

Divi’s Laboratories, on February 11, said its consolidated profit after tax (PAT) for the quarter came in at ₹583 crore, marginally lower than ₹589 crore in the same period last year. The company's total income rose 12.11% to ₹2,692 crore from ₹2,401 crore reported in the quarter ending December 31, 2024.

The company also posted an exceptional item loss of ₹74 crore due to the impact of the new labour codes.

Divi's Laboratories shares: Should you buy, sell, or hold after Q3 results

Brokerage firm Systematix upgraded the stock to a hold with a revised target price of ₹6,564 (50 times FY28E EPS), citing the company's Q3 performance was in line with consensus expectations.

"While there are certain patent expiries expected to impact Divis' custom synthesis business revenue, new launches in the same segment should more than offset. They maintain their guidance around maintaining a double-digit growth trajectory," said Systematix.

"We marginally change our estimates and roll over to FY28E EPS. We estimate revenue, EBITDA, and EPS CAGR of 14%, 16%, and 17%, respectively.

Brokerage firm Motilal Oswal has a neutral view on the stock with a target price of ₹6,925.

"We largely maintain our estimates for FY26/FY27/FY28. We value the company at 55 times 12-month forward earnings to arrive at a target price of ₹6,925," said Motilal Oswal.

Motilal Oswal highlighted that Divi continues to strengthen its relationships with customers in CS on the back of increasing capacity and enhancing its technological offerings. Its knowledge base in peptide space has not only enabled its better association with innovators but also gained contracts from them.

"We estimate a CAGR of 18%, 20%, and 21% in revenue, EBITDA, and PAT for FY26-28. Considering limited upside from current levels, we maintain 'neutral' on the stock," said Motilal Oswal.

Read all market-related news here

Read more stories by Nishant Kumar

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.