Divi’s Labs’ Q1FY25 Results

• Divi’s Labs reported an 8% quarter-on-quarter (QoQ) decrease in its consolidated revenues for the quarter ended June (Q1FY25). On a year-on-year (YoY) basis, it witnessed a growth of 18%.
• Its expenses for the quarter were down by 5% QoQ and up 17% YoY.
• The net profit decreased 20% QoQ and was up 21% YoY.
• The earnings per share (EPS) of Divi’s Laboratories stood at 16.2 during Q1FY25

Divi’s Labs’ Financial Statements for Q1FY25:

Financials:

• Total Income: ₹2,197 crores, up 18% YoY from ₹1,859 crores in Q1FY24.
• Net Profit: ₹430 crores, up 21% YoY from ₹356 crores.
• EBITDA: ₹622 crores, up 23% YoY from ₹504 crores.
• EBITDA Margins: EBITDA margin at 29.4%, up from 28.3% YoY.
• Earnings Per Share (EPS): ₹16.2, compared to ₹13.4 in Q1FY24.

Q1FY25 Conference Call Highlights:

Generics

• API business saw double-digit growth in Q1FY25.
• Key products like naproxen, gabapentin, and dexamethasone are experiencing pricing pressure. Divi’s remains a leading supplier for naproxen sodium and dexamethasone, with growth rates of 2-5%.
• New product patents are expiring between FY25-27; plans exist to commercialise generics like ticagrelor in FY26.
• Volume growth of one sartan product is at 60%.

Kakinada Plant

• Construction of Unit 3 is on track, with Phase 1 (200 acres) expected to be completed by FY25. Regulatory approval and product validation will follow, with commercial sales projected to begin thereafter.
• Phase 2 construction may commence after reaching 90% utilisation of Phase 1. Current capacity supports CS projects in clinical phases 2 & 3; additional capacity may be needed for large-scale product commercialisation.

Contrast Media

• Development is underway for both iodine-based products (for CT scans) and Gadolinium (for MRI).
• Innovators dominate 85-90% of the contrast media market; generics hold a 10-15% share.
• Iodine-based products are provided to both generics and innovators; in regulated markets, only innovators are served.
• Several new Gadolinium compounds in Phase 3 are under development for targeting specific body scans.

Custom Synthesis (CS)

• Current manufacturing includes building blocks GLP-1, GLP-2, and other peptide products. Expansion includes two new 500-litre reactors to enhance commercial batch production.
• Forward integration plans include fragment manufacturing for GLP products at Unit 1 in Hyderabad, with capabilities for both solid and liquid fragments.
• Several molecules are in Phase 2 and 3, showing promising growth potential in existing commercial products.
• The ₹7 billion project with an innovator is on track and in the investment phase.

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