Divi’s Labs Shares Jump 5% After Strong Q3 Results – Profit Rises 64%

Shares of Divi’s Laboratories surged nearly 5% on Monday after the company reported a stellar 64.5% year-on-year (YoY) rise in its consolidated net profit for the third quarter of FY25. The pharmaceutical giant posted a net profit of ₹589 crore for the quarter ended December 2024, up from ₹358 crore in the same period last year. The company's revenue also saw strong growth, climbing 25% YoY to ₹2,319 crore.

The impressive growth in net profit was backed by higher operating income and better margins. Profit before tax (PBT) for the quarter stood at ₹726 crore, a sharp increase from ₹489 crore a year ago. Earnings before interest, tax, depreciation, and amortization (EBITDA) rose to ₹743 crore, with EBITDA margin improving to 32.04% from 26.90% in the previous year.

Despite the strong YoY growth, the company’s revenue saw a slight sequential dip of 1% compared to the previous quarter. Total expenses increased by 14.6% YoY to ₹1,675 crore, reflecting higher costs.

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Stock Market Reaction and Performance

Following the results, Divi’s Labs share price climbed nearly 5% to touch ₹5,835.65 on the BSE before retracing slightly. As of 2:10 PM, the stock was trading 3.74% higher at ₹5,832.40, while the broader BSE Sensex was down 0.46%. Divi’s Labs shares ended at ₹5,889.30 on Monday. 

Over the past six months, Divi’s Labs shares have gained 16%, significantly outperforming the BSE Sensex, which has slipped 5% in the same period. On a one-year basis, the stock has soared 57%, while the Sensex has risen by just 6.7%.

Key Developments and Future Outlook

Divi’s Laboratories recently announced that a part of its Kakinada Project (Unit-III) started commercial operations on January 1, 2025. The remaining portion is expected to become operational within the next six months. The company has invested ₹433 crore in capital assets during Q3 and ₹557 crore over the past nine months, with ₹418 crore allocated to the Kakinada project.

Additionally, the company’s board approved the reappointment of Dr. Kiran S. Divi as Whole-time Director and CEO for a five-year term starting April 1, 2025.

Conclusion

Divi’s Laboratories continues to showcase strong financial performance, backed by rising profits, expanding margins, and strategic investments. The company’s steady growth, global presence, and leadership in the pharmaceutical sector can potentially make it an attractive choice for investors. With ongoing expansion projects and a solid business model, Divi’s Labs looks to remain a key player in the pharmaceutical industry.