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Divi's Laboratories Ltd (DIVISLAB): Q2 FY27 results (quarter ended 30 Sep 2026)

Divi's Laboratories (DIVISLAB) No replies

Vishal @vishal #1

Consolidated figures, ₹ crore. Results announced 7 Nov 2026 [1][2]. PAT = consolidated PAT. EBITDA is my calculation and excludes other income; the company's own EBITDA wasn't in coverage. YoY/QoQ % and margins are my calculations unless stated.

MetricQ2 FY27YoYQoQ
Revenue from ops3,676+35.4%+19.4%
EBITDA (≈ derived)≈1,566≈+76%≈+25%
EBITDA margin (≈)≈42.6%32.7%40.7%
Other income94−35%+47%
PBT1,505+65.0%+27.5%
PAT1,127+63.6%+24.9%
PAT margin30.7%25.4%29.3%
EPS (₹)42.49+63.6%+25.2%
Other income / PBT6.2%15.9%5.4%

Margin and ratio rows show year-ago and last-quarter values. ≈ EBITDA = revenue − (total expenses ₹2,265 cr − depreciation ₹142 cr − finance cost ₹13 cr). Earlier quarters use Screener's operating profit [5]. Sources: [1][2][5]

Source notes: InvestyWise headlines "₹1,140 cr profit" [3]. That is standalone PAT; consolidated PAT is ₹1,127 cr [1]. ₹3,770 cr is consolidated total income, which includes other income [2]. One headline's "revenue ₹3,080 cr" is the Q1 figure.

Quality of earnings

  • Growth is operational, not from other income. Other income fell to ₹94 cr from ₹145 cr; the forex gain was ₹24 cr vs ₹63 cr [1]. Other income is just 6% of PBT. The tax rate is steady at about 25% (my calculation).
  • Profit is up, cash isn't (yet). Inventories rose to ₹5,540 cr from ₹3,954 cr in March, and receivables to ₹3,487 cr from ₹2,984 cr [4]. As a result, H1 operating cash flow was ₹384 cr vs ₹1,645 cr a year ago [4].
  • Inventory is being built. Raw-material purchases nearly doubled to ₹1,812 cr, partly added to inventory (₹631 cr) [1]. My view: this suggests stock-building for future deliveries.
  • Capex: ₹872 cr was spent in H1 [4].

Margins (Chart 3)

EBITDA margin: 32.7% → 34.2% → 33.0% → 40.7% → 42.6% (my calculation). It is the second straight quarter above 40%, a clear step up from FY26.

Segments

Divi's reports one segment: APIs, intermediates and nutraceutical ingredients [1]. Chart 5 shows cash flow and working capital instead.

Commentary

No guidance was found in coverage. The earnings call was at 2 pm on 7 Nov. I can add management's commentary once it is covered.

Positives

  • Revenue +35%, PAT +64% [1]
  • Margins at a five-quarter high (my calculation)

Concerns

  • Weak cash conversion in H1 [4]
  • Inventory build-up [4]

Things to track in Q3 FY27

  1. Whether inventory turns into sales
  2. Operating cash flow
  3. Margin sustainability above 40%
  4. Commentary from the call

Not a buy/sell recommendation. I am not a SEBI-registered analyst. Facts are sourced; opinions are labelled.

Sources [1] Multibagg – Q2 profit +64% · [2] InvestyWise – consolidated results · [3] InvestyWise – standalone results · [4] Multibagg – cash flow & balance sheet · [5] Screener.in – consolidated

Charts: (1) 5 quarters revenue & PAT with EPS [1][5]; (2) FY23–FY26 [5]; (3) margins [1][5]; (4) cash flow & working capital.

Author's disclosure: Not invested

Posts are members’ own views and are not investment advice. Holdings shown are what each member disclosed when posting. Research notes are by SEBI-registered analysts under their own registration; Mudraa hosts them and does not endorse them.

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