Divi’s Laboratories Ltd.
Comprehensive Analysis for Long-Term
Investors
As of July 2, 2025
1. Management Integrity & Background Check
• No fraud allegations or SEBI orders against promoters or management (1).
• Promoters (Murali K. Divi family) hold ∼ 52% (2025), with consistent stake (2).
• Green Flag: Clean governance record, strong promoter alignment.
2. Succession Planning
• No explicit succession plan disclosed in FY25 Annual Report (3).
• Key management: Murali K. Divi (Chairman, 40+ years experience); Kiran S. Divi (CEO) (3).
• Compensation data not disclosed; assumed industry-aligned.
• Neutral Flag: Limited succession transparency; family-led management mitigates risk.
3. Warrants / Dilution Instruments
• No warrants or convertible bonds in FY25 (1).
• Stable equity base (26.55 Cr shares, 2 face value) (7).
• Green Flag: No dilution risk.
4. Frequent Acquisitions
• No acquisitions in FY25; focus on organic growth via capacity expansion
5. Mergers / Demergers
– No mergers or demergers reported (1).
– Focus on core CRAMS and API business
6. Product Diversification vs. Pure Play
* Focused on CRAMS (60% revenue) and APIs (40%); includes generics, custom synthesis (3).
* Green Flag: Focused yet diversified within pharmaceuticals, reducing product risk.
7. Client Base & Customer Concentration
* Serves global pharma giants; no single client > 20% revenue
8. Government Influence or Pricing Controls
· No government ownership; APIs face limited price controls in India
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9. Customer & Supplier Dependency
· No customer dependency due to diversified base
10. Innovation & R&D
· R&D spend not disclosed; focus on CRAMS, new APIs
11. Geographic Diversification
· Revenue split: ∼ 60% exports (US, Europe), ∼ 40% domestic
12. Macroeconomic Sensitivity
· Near debt-free (D/E: 0.0003 in FY25); negligible interest rate sensitivity
13. ESG & Sustainability
· Focus on green chemistry, waste reduction; FY25 sustainability report filed
14. Technology & Cybersecurity
· Relies on proprietary API tech; no critical dependencies
15. Risk Assessment Matrix
Risk Type Level Note
Macroeconomic Moderate Raw material cost volatility (3,821 Cr in
FY25) (7).
Operational Moderate High receivables (2,731 Cr in FY25) (7).
Regulatory Low No fines; PLI scheme support (1).
Geopolitical Low Balanced export exposure (3).
Technological Moderate Competition from peers (6).
16. Future Prospects and Challenges
· Companys Words: Expand CRAMS, new API facilities (3).
· External Context: Global CRAMS market CAGR 8% (2023–2030)
17. Sector Outlook
· Companys Words: Strong CRAMS and API demand
18. Business and Industry Analysis
· Business Model: CRAMS, APIs; vertically integrated
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19. Competition & Product Superiority
· Companys Words: High-quality APIs, custom synthesis
20. Order Book Position
· Not disclosed; steady CRAMS contracts with global pharma
21. Management Assessment
· a. Project Execution Skills
· 1,349 Cr capex (FY25) for API plants on track (7).
· Green Flag: Strong execution in capacity expansion.
· b. Promoter Buying Shares
· Stable promoter holding (∼ 52%) (1).
· Neutral Flag: No recent promoter buying, but high stake signals confidence.
· c. FII Shareholding
· FII holding ∼ 15% (2025), moderate for sector (1).
· Neutral Flag: Moderate FII interest, not speculative.
22. Additional Questions
· Largest Investors: Promoters (∼ 52%), FIIs (∼ 15%), MFs (∼ 10%) (1).
· Future Investments: 1,000 Cr capex planned for FY26
23. Annual Report Analysis
· Industry & Company Outlook
· Companys Words: Growth in CRAMS, APIs
24. Red Flags and Discrepancies
· Profit decline: 2,960.45 Cr (2022) to 1,600 Cr (2024), recovering to 2,191 Cr (2025)
Key Financial Metrics (2016–2025)
Financial Trends (2016–2025)
Sales Trend
Net Profit Trend
References
[1] BSE India Filings, 2025.
3
Metric 2016 2018 2020 2022 2024 2025
Sales ( Cr) 3776.36 3891.49 5394.42 8959.83 7845 9360
Net Profit ( Cr) 1125.78 877.01 1376.54 2960.45 1600 2191
OPM (%) 37.67 32.61 33.86 43.36 28.17 31.71
Debt ( Cr) 42.47 63.11 38.85 3.69 3 4
Market Cap ( Cr) 26211.49 28944.81 52809.28 116874.43 91472.72 182249.68
ROE (%) 26.22 14.80 18.83 25.24 11.80 14.63
Net Fixed Asset Turnover 2.63 1.95 1.94 2.07 1.66 1.72
·104
1
Sales
0.8
Sales ( Cr)
0.6
0.4
0.2
0
2,016 2,018 2,020 2,022 2,024 2,025
Year
Figure 1: Sales trend from 2016 to 2025, showing strong growth with a dip in 2024.
[2] Economic Times, “Divi’s Labs Promoter Track," 2025.
[3] Divi’s Laboratories Ltd. Annual Report, 2024–25.
[4] Business Standard, “Divi’s Labs Outlook," 2025.
[5] IBEF Pharmaceutical Report, 2025.
[6] Moneycontrol, “Divi’s vs. Peers," 2025.
[7] Divi’s Lab.xlsx, 2025.
4
3,000 Net Profit
Net Profit ( Cr)
2,000
1,000
0
2,016 2,018 2,020 2,022 2,024 2,025
Year
Figure 2: Net Profit trend from 2016 to 2025, reflecting volatility with recovery in 2025.
