Divi’s Laboratories (DIVI) posted a 72% year‑over‑year rise in EBITDA for Q1FY27, beating the analyst consensus by 48%. This strong performance was largely driven by the CS segment and a favorable currency tailwind.
Management explained that the CS segment’s revenue growth was supported by the start of three capital‑expenditure projects that have now entered the validation stage. In addition, inventory gains helped lift gross margins.
Looking ahead, the company expects its margins and CS revenues to accelerate in FY27/28, thanks to opportunities in GLP‑based products. As a result, the FY27 and FY28 earnings per share estimates have been raised by 7% to 9%.
Analysts project a compound annual growth rate of about 25% for both EBITDA and PAT over the FY26‑28 period. At present market price, the stock trades at roughly 57 times the FY28 earnings per share.
The research team maintains an ‘Accumulate’ recommendation and has updated the target price to INR 8,600 per share.