Established in the year 1990, Divi's Laboratories Ltd (NSE:DIVISLAB) is a leading manufacturer of Active Pharmaceutical Ingredients offering high quality products to over 95 countries.1

Divi’s manufactures Generic APIs, Nutraceutical Ingredients and offers Custom Synthesis of APIs to Big Pharma providing a competitive advantage over the entire life cycle of the products.

Manufacturing Facilities

Divi’s currently operates two manufacturing sites near Hyderabad and Visakhapatnam in India. A third manufacturing site is proposed to be set up near Kakinada, India in 2020.2

Both the manufacturing units have more than 35 production buildings and 50 pharma suits with a total reaction capacity of more than ~12000m, making it one of the largest API manufacturing facilities in the world.

The pilot plants at Divi’s are capable of handling high potent products (Products with exposure level up to 10mcg/m3) and several low dose products under cGMP.

Divis is Commercial-scale manufacturer of non-potent & highly potent APIs to deliver from gram scale to 1000’s of tons under cGMP.

Divi’s pharma areas comply with class 100, 000 clean air requirement and each pharma will have suitable filtration and drying equipment like centrifuge, ANFD, VTDR, RCVD, milling and sieving equipment’s.


Research & Development

More than 350 scientists that are stationed in all the three R&D locations are engaged in developing non-infringing processes attaining commercially viable price throughout the lifecycle of the product, infiltrating continuous process improvements.3

Process Development and Support Centers in both manufacturing units develop environmentally friendly process and allows easy and efficient scale-up.

Process Development Centres work on process development and scale up from gram scale further through various stages of development, process optimization, impurity profile, pilot studies, pre-validation batches, validation of process and transfer of technology to plant.

Process Support Centers at Divi’s review improvement of processes, helps QA with investigations, helps the regulatory team answer queries from regulatory bodies.

Business Segments

Over the past 30 years, various diverse teams have been involved in providing high quality Generic APIs, Custom Manufacturing solutions to several Big Pharma and most recently providing highly specialized Nutraceutical ingredients.4

Generic APIs

Divi’s continues to be a global leader in Large Volume Generic APIs. The product list includes a very selective 30 APIs that are manufactured commercially in 10’s to 100’s/1000’s of Tonnes each year and continues to be the largest API manufacturer in the world.5

In addition to the 30 APIs that Divi’s manufacture commercially, there are additional 10 APIs that are in various stages of R&D/pilot scale development process.

The team at Divi’s is committed to achieving global leadership position in the molecules that are selected and this is demonstrated by the fact that Divi’s is one of the top 2 API manufacturers in the world for 18 out of the 30 molecules.

Divi’s has achieved this leadership position because of various factors such as backward integration to basic starting materials, dedicated production blocks with large batch sizes and significant capacity creation ahead of time.

Divi’s continues to be committed to providing complementary role to the customer by being dedicated to API manufacturing.

Divi’s is committed to being a ‘Reliable supplier of APIs’ with competitive pricing and having uniform quality for all the customers around the world by continually improving the process and engineering efficiencies and implanting various Green Chemistry principles.

Divi’s manufacturing facilities have undergone several audits by Global Regulatory Authorities, various Big Pharma/Multi-National Companies, Statutory Authorities and Global Environmental, Health and Safety teams.

Divi’s specially provides the global pharmaceutical industry with the following reliable, cGMP quality, value driven solutions for the below mentioned products:

Custom Synthesis

Divi’s is engaged in Custom Synthesis(contract manufacturing services) of APIs and Intermediates for global innovator companies with a vast portfolio of products across diverse therapeutic areas.6

Divi’s is competent in handling high energetic reactions with high potency to address unmet requirements of the Big Pharma customers.

Both the manufacturing units have undergone several EHS, Quality and Sustainability audits by several Big Pharma.

12 out of the top 20 Big Pharma Companies across US, EU and Japan are associated with Divi’s for more than 10 years.

Divi’s being a core generic API manufacturer is capable of handling highly hazardous / energetic reactions (Handling of NBL/Cyanide/metals)- Dedicated facilities for handling High pressure Rxs up to 20Kg/cm2, Cyanations & pyrophoric reactions.

Divi’s competent and qualified R&D team with over 350 scientists specialize in developing innovative processes and continuously optimize them to maintain competitive leadership position.

Divi’s manufacturing units have been inspected successfully many times by USFDA (Most recently in Jan 2020), EU authorities (Most recently in August 2019) and also by Japanese health authorities.

Segregated and dedicated production blocks for handling High Energetic Reactions, Azide Chemistry  and Pressure Reactions.

Divi’s has Containment facility with closed handling systems like Glove boxes for charging, Isolators for offloading, Powder Transfer Systems and flexible isolators for changing filters and cleaning the utensils etc.


Divi’s Nutraceutical Facility at its Unit II manufacturing site is an integrated facility for production of active ingredient and finished forms of Carotenoids. The facility includes a full-fledged R&D, Application Testing and Support Facility.7

Divi’s is currently supplying most of the carotenoids to all the major food, dietary supplement and feed manufacturers around the world.

Divi’s Nutraceutical Facility has been frequently audited by various regulatory/statutory authorities such as US FDA (CFR 110) and Halal/Kosher.

The product portfolio includes a complete set of Carotenoids such as Beta Carotene, Astaxanthin, Lycopene, Canthaxahnthin  as well as other finished forms such as Lutein, Vitamins (A, D3, D2, E Acetate and A Palmitate).

In addition to the standard nutraceutical product portfolio offering, Divi’s also offers customized ingredient solutions in liquids, beadlets and powder forms.

Industry Overview

Global Pharmaceutical Industry

Global spending on medicines is forecast to reach $1.5 trillion by 2021, up 33 percent from 2016 levels, according to a research released by the Quintiles IMS Institute. The growth is predicted on the basis of various factors like market drivers, current and upcoming trends, current growth pattern, and market challenges. While the major developed markets will remain the dominant contributor, the pharmerging markets’ overall contribution to global sales growth will continue to rise to almost 35%. According to an in-depth analysis by a leading consulting firm, by 2023, North America is expected to retain its leading position in the global pharmaceuticals market with a market share of 45%. Asia Pacific pharmaceuticals market is expected to retain its second position with a market share of 24%. Europe is expected to be worth 20%. Latin America and Middle East and Africa (MEA) are expected to retain 11% market share of global pharmaceuticals market.8

Apart from ageing and rising population, the improvements in purchasing power and access to quality healthcare and pharmaceuticals to poor and middle-class families worldwide also is the growth of global pharma industry. The new medicines will address significant unmet needs across wide range of disease areas including cancer, auto-immune, metabolic and central nervous system. Innovations in advanced biologics, nucleic acid therapeutics, cell therapies are also driving the global pharmaceuticals industry growth.

Indian Pharmaceutical Industry

India is prominent and rapidly growing its presence in global pharmaceuticals industry. The Indian pharmaceutical industry is the world’s third largest by volume with an annual revenue of about USD41 billion (domestic formulations market and exports). It is the largest provider of generic medicines globally, occupying a 20% share in global supply by volume, and also supplies 62% of global demand for vaccines. The Indian pharma industry has been growing at a compounded annual growth rate (CAGR) of more than 15% over the past five years.

The Indian bulk drug industry has progressed from being perceived as an industry manufacturing simple API molecules to becoming the preferred destination for high value and complex APIs. The industry currently ranks third globally and has its advantages in terms of availability of a large pool of chemists and technologists, world-class facilities, and lowcost operations. The Government aims at reducing dependency on import of active pharma ingredients, its key starting materials or lower level intermediates in order to ensure sustainable growth and service the requirements of the global market. Towards this objective, Government is also setting up a taskforce to encourage domestic production of active pharma ingredients as well as its starting materials and is making significant commitment of funds for creating infrastructure for the same. The Department of Pharmaceuticals aims to make the country a hub for end-to-end drug discovery under its ‘Pharma Vision 2020’.

Financial Overview

The company's product portfolio comprises of two broad categories i) Generic APIs (Active Pharma Ingredients) and Nutraceuticals and ii) Custom Synthesis of APIs, intermediates and specialty ingredients for innovator pharma giants.

The Company operates predominantly in export markets and has a broad product portfolio under generics and custom synthesis.

FY 2019-20

Total revenue for the year ended March 2020, has grown by 9% to Rs 550043 lakhs as against total revenue of Rs 503624 lakhs for the last year. Profit before tax (PBT) for the year amounted to Rs 181329 lakhs as against Rs 183323 lakhs for last year. Profit after Tax (PAT) before Other Comprehensive Income for the year amounted to Rs 137271 lakhs as against a PAT of Rs 133265 lakhs for the last year. Earnings Per Share of Rs 2/- each works out to Rs 51.71 for the year as against Rs 50.20 for the last year.

Current tax provision for the year came to Rs 38779 lakhs as against Rs 47245 lakhs for the last year. While determining the tax provision for the year, due consideration has been given for enhanced additional depreciation and investment allowance available in respect of investment in plant and machinery for setting up new manufacturing units in notified backward areas in the state of Telangana and Andhra Pradesh. In addition, there was a reversal of current tax of earlier years amounting to Rs 3370 lakhs. Deferred tax provision for the year was higher at Rs 5279 lakhs as against Rs 2813 lakhs and this is due to the timing difference of depreciation as the company has capitalized fixed assets of Rs 87838 lakhs on completion of some of the capex projects

Exports constituted 87% of sales revenue during the year. Exports to advanced markets comprising Europe and America accounted for 71% of business.

Other Income mainly comprises of Dividend Income, gain on forex fluctuation and net gain on financial assets measured at fair value. Other Income for the year amounted to Rs 18986 lakhs as against Rs 15658 lakhs last year. Gain on foreign currency transactions for the year amounted to Rs 8204 lakhs as against Rs 3092 lakhs last year.

Divi's Laboratories has taken up two brownfield projects called DCV SEZ Unit at village Chippada, Bheemunipatnam Mandal, Visakhapatnam and DC SEZ Unit at village Lingojigudem, Choutuppal Mandal, Yadadri Bhuvangiri District, Telangana with an estimated investment of Rs 600 crores each. Besides this, Divi's Laboratories has also taken up debottlenecking, backward integration and utilities expansion projects at both the manufacturing sites.

The Company has commenced commercial operations from a part of the DC-SEZ Unit in February, 2020, and from a part of the DCV-SEZ Unit in March, 2020. A part of the backward integration, debottlenecking and utility expansion projects have come into utilization this year. The rest of these projects will be completed and come into utilization by end of second half of financial year 2020-21. The balance works of the brownfield projects of DC-SEZ and DCVSEZ are also expected to be completed by second half of financial year 2020-21.

During the year, Divi's Laboratories has capitalized PPE and Intangible Assets valuing Rs 87838 lakhs. Deductions of Rs 361 lakhs represent Assets discarded during the year. Capital WIP as at the year-end amounted to Rs 91969 lakhs.

Q2 FY2020-21

Divi’s Laboratories on Nov 07, 2020 posted a 45.63 per cent year-on-year (YoY) growth in consolidated net profit at Rs 519.59 crore for the quarter ended September 30. It had reported a profit of Rs 356.78 crore for the corresponding quarter last year.9

Revenue from operations increased 21 per cent YoY to Rs 1,749.30 crore.

For the current quarter, Divi’s Labs witnessed a forex loss of Rs 16 crore against a gain of Rs 13 crore.

For the half-year ended September 30, the company earned a consolidated total income of Rs 3,506 crore as against a consolidated total income of Rs 2,680 crore during the same period last year. Profit after tax jumped 60.89 per cent YoY to Rs 1,012 crore.

“Divi's Laboratories has capitalised assets of Rs 615 crore during the quarter and the total capitalisation done during the half-year amounted to Rs 830 crore. The company expect to complete the ongoing capex programs by end of the financial year. The company is taking up a new capex for an aggregate amount of Rs 400 crore for meeting new business opportunities in the custom synthesis projects and needed to be completed on fast track,” Divi’s Laboratories said.

Divis Labs Consolidated December 2020 Net Sales at Rs 1,701.44 crore, up 21.86% Y-o-Y 10

March 05, 2021; Reported Consolidated quarterly numbers for Divis Laboratories are:

  • Net Sales at Rs 1,701.44 crore in December 2020 up 21.86% from Rs. 1,396.26 crore in December 2019.
  • Quarterly Net Profit at Rs. 470.62 crore in December 2020 up 31.06% from Rs. 359.09 crore in December 2019.
  • EBITDA stands at Rs. 710.53 crore in December 2020 up 32.67% from Rs. 535.57 crore in December 2019.
  • Divis Labs EPS has increased to Rs. 17.73 in December 2020 from Rs. 13.53 in December 2019.


  1. ^ https://www.divislabs.com
  2. ^ https://www.divislabs.com/pharmaceutical-company/world-largest-api-manufacturing-facility/
  3. ^ https://www.divislabs.com/pharmaceutical-company/top-pharma-company-india/
  4. ^ https://www.divislabs.com/api-manufacturer-world/
  5. ^ https://www.divislabs.com/api-manufacturer-world/active-pharmaceutical-ingredients/
  6. ^ https://www.divislabs.com/api-manufacturer-world/pharmaceutical-contract-manufacturers/
  7. ^ https://www.divislabs.com/api-manufacturer-world/nutraceuticals-company/
  8. ^ https://www.divislabs.com/wp-content/uploads/2020/09/30th-Divi-Annual-Report.pdf
  9. ^ https://economictimes.indiatimes.com/markets/stocks/earnings/divis-labs-q2-results-net-profit-jumps-46-yoy-to-rs-520-crore/articleshow/79096510.cms
  10. ^ https://www.moneycontrol.com/news/business/earnings/divis-labs-consolidated-december-2020-net-sales-at-rs-1701-44-crore-up-21-86-y-o-y-2-6607801.html
Created by Asif Farooqui on 2020/11/16 13:22
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