Divis Laboratories is scheduled to announce its financial results for the second quarter (July-September) of the fiscal year 2024-25 on 8th November. The Indian pharmaceutical company’s quarterly performance is anticipated to show a strong increase on a year-on-year (YoY) basis, with the potential for growth across multiple segments.
For those looking to invest in stocks, these developments offer insights into the performance and trends within the pharmaceutical sector.
Expected rise in net profit and revenue YoY
Analyst projections indicate a significant 36.2% YoY rise in net profit for Divis Labs, reaching an estimated ₹474 crore for Q2FY25. This increase compares with the ₹348 crore net profit reported in Q2FY24. Revenue is also anticipated to rise, with a 15.2% YoY increase, reaching approximately ₹2,199 crore in Q2FY25 from ₹1,919 crore in Q2FY24. Such numbers can provide those aiming to invest in stocks with a snapshot of Divis Labs’ financial momentum.
API and custom synthesis segments drive growth
Divis Labs’ growth is expected to be led by its active pharmaceutical ingredients (API) and custom synthesis manufacturing (CSM) segments. In particular, the CSM segment is projected to perform strongly due to increased supplies from one of the company’s key projects, which was commercialised in the third quarter of FY24. For investors who invest in stocks, understanding the factors driving revenue in core segments can be beneficial when evaluating a company’s performance.
Nutraceuticals segment shows a decline
Contrary to growth in the API and CSM segments, the nutraceuticals segment is anticipated to experience a 4% YoY decline in sales. Although nutraceuticals remain a strategic part of Divis Labs’ portfolio, this dip reflects varying demand within the sector. Those who invest in stocks in the pharmaceutical industry may want to consider how segment-specific performance affects the overall revenue mix.
Estimated quarterly growth and comparison
Sequentially, Divis Labs’ Q2 revenue is expected to increase by 3.6%, following the ₹2,118 crore revenue posted in Q1FY25. The company’s net profit may grow 23.5% on a quarter-on-quarter (QoQ) basis, rising from ₹430 crore in the previous quarter. This potential increase could be noteworthy for investors who invest in stocks, especially when comparing performance across quarters to observe growth trends.
EBITDA and margin performance are expected to improve
Divis Labs is also projected to show a rise in earnings before interest, tax, depreciation, and amortisation (EBITDA), which may grow by 57% YoY to reach approximately ₹750 crore. Analysts expect an improvement in EBITDA margins, which could expand by 650 basis points YoY to 31.6%. For those who invest in stocks, monitoring profitability metrics like EBITDA growth and margin expansion can indicate how effectively a company is managing costs relative to revenue.
For android only