Citi has maintained its Buy rating on Divi's Laboratories with a target price of Rs 11,700, as reported by the brokerage. The investment bank highlighted potential opportunities for the Indian contract development and manufacturing organisation (CDMO) from the scale-up of Novo Nordisk's oral Wegovy. According to Citi, the ramp-up of Novo Nordisk's oral Wegovy could create potential optionality for Indian CDMOs, with Divi's Laboratories particularly well positioned to benefit from this development. Citi emphasized that Divi's has an integrated and cost-efficient peptide manufacturing platform, which could provide an advantage as demand for peptide-based therapies expands. The latest market data shows Divi's in a strong uptrend after breaking out of a multi-year accumulation and consolidation phase, with the stock currently consolidating around the Rs 8,400–Rs 8,600 zone after a sharp rally towards Rs 9,600.
Citi emphasized that Divi's has an integrated and cost-efficient peptide manufacturing platform, which could provide an advantage as demand for peptide-based therapies expands. The brokerage noted that Divi's integrated manufacturing capabilities and cost-efficient peptide platform could position the company to participate in opportunities across manufacturing and supply chains. Novo Nordisk's oral Wegovy is part of the broader shift towards oral GLP-1 treatments, potentially expanding the addressable market for obesity and diabetes therapies. Citi believes the company's existing capabilities provide a strong foundation as peptide-based drug manufacturing scales up, with the integrated platform well-suited for the growing demand in this segment. The latest technical analysis suggests Rs 9,800 as a key hurdle and Rs 10,000 as the next potential level for the stock.
While acknowledging the potential from oral Wegovy, Citi continues to view Eli Lilly's Tirzepatide as the more significant peptide opportunity for Divi's. The brokerage believes any participation by Divi's in the oral Wegovy opportunity should currently be viewed as potential optionality rather than a core earnings driver. Citi believes the company is already exposed to the broader GLP-1 ecosystem, and any additional business linked to Novo Nordisk's oral Wegovy could provide further upside if it materializes. For CDMOs, increased peptide demand could translate into opportunities across manufacturing and supply chains, with Divi's well-positioned to capitalize on this trend. The technical outlook remains constructive with the stock's multi-year breakout supporting continued bullish momentum in the peptide manufacturing space.
According to market data, Divi Labs shares closed 2.91% higher at Rs 9,624 per share on Wednesday. The shares have demonstrated strong performance with a 5.09% gain in one week and 11.95% increase in one month. The stock has shown remarkable year-to-date growth of 51.7% and 59.05% over one year. The Economic Times reports that options data suggests a bull call spread strategy for Divi's Laboratories this week, indicating continued institutional interest in the stock. Citi continues to identify Divi's Laboratories as its top pick in the Indian pharmaceutical sector, with the brokerage retaining its Buy rating and target price of Rs 11,700 based on the company's strong fundamentals and growth prospects in the peptide manufacturing space.
