Prabhudas Lilladher has issued an 'Accumulate' rating on Divi's Laboratories with a target price of ₹6900 per share in its research report dated May 25, 2026. According to the brokerage's analysis, the recommendation comes despite Q4FY26 EBITDA missing estimates due to lower gross margins, while revenues were supported by the Contract Services segment and currency tailwinds.
The company's Q4FY26 EBITDA missed estimates primarily due to lower gross margin performance. However, revenues were largely aided by the Contract Services segment and benefited from currency tailwinds. Management has indicated that inventory levels may increase further in Q1FY27E to ensure uninterrupted operations, as reported by Prabhudas Lilladher.
The brokerage expects stable margins in FY27 and anticipates revenue acceleration from FY28 driven by the commencement of some CDMO and contrast media contracts along with peptide revenue scale-up. Prabhudas Lilladher projects 19% EBITDA and PAT CAGR over FY26-28E period. At the current market price, the stock is trading at 52x FY28E EPS.
The brokerage has revised its FY27E/FY28E EPS estimates down by 2-4% following the latest results. Despite the estimate cuts, the firm maintains its positive outlook on the pharmaceutical company's growth prospects, particularly in the CDMO and specialty segments.
