Macquarie sets Divi’s Labs stock target at INR7,400 on growth outlook

Published 19/02/2025, 11:56
Macquarie sets Divi’s Labs stock target at INR7,400 on growth outlook

On Wednesday, Macquarie initiated coverage on Divi’s Laboratories Ltd (DIVI:IN) with an Outperform rating and set a price target of INR7,400.00. The firm’s analysis anticipates a significant uptick in the company’s financial performance, projecting a more than threefold increase in top-line revenue by the fiscal year ending in 2030 (FY30E) and a doubling of profit after tax (PAT) by FY27E, with expectations for it to quadruple by FY30E.

The positive outlook is based on several factors, including the scaling up of multiple custom synthesis products, the introduction of new generic Active Pharmaceutical (TADAWUL:2070) Ingredients (APIs), and the benefits of operating leverage. Macquarie’s forecasts for revenue, EBITDA, and earnings are 6-14% higher than the current Bloomberg consensus estimates for FY26/27e.

The analyst at Macquarie highlighted the custom synthesis business as a key growth driver for Divi’s Laboratories, citing the manufacturing of GLP-1, contrast media APIs, and the ramp-up of Valsartan-Sacubitril as significant contributors. In addition to revenue growth, the firm expects Divi’s Laboratories to experience a strong improvement in profitability, which will be reflected in enhanced return ratios. The projected Return on Invested Capital (ROIC) is set to improve from 20% in FY24 to over 35% by FY30E.

The market’s response to this coverage initiation by Macquarie is yet to be seen, as the firm’s analysis presents a bullish stance on the future performance of Divi’s Laboratories, underpinned by strategic business expansions and operational efficiencies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.