Citi said Divi’s Laboratories’ valuations are reasonable due to tailwinds in the sector and the company’s order pipeline.
It said concerns around Orforglipron (oral GLP-1) Ph-III appear overdone as the consensus is still building sales worth over $15 billion in their 2030 estimate.This seems enough Divi’s intermediated supplies forecast of around $200 million to $300 million, Citi said, adding that the strong adoption in Tirzepatide (GLP-1 injection) and upgrades in the product indicate an increase in the peptide GLP-1 TAM for Divi’s.
The brokerage wrote that concerns regarding Entresto going generic in the US may start fading away as the company continues to supply APIs without any change in pattern, suggesting its limited or no exposure to the US market.
Entresto is Novartis’ blockbuster drug for heart failure treatment and it generates around $6 billion in sales for the company.Divi’s Laboratories is expected to be a key supplier of active pharmaceutical ingredients (APIs for Entresto to Novartis).
News developments last month disclosed that MSN had won the patent litigation related to Entresto, clearing the path for a generic launch in the US after July 15, 2025 for MSN.
Entresto API is expected to be the largest product in Divi’s Laboratories’ innovator Custom Synthesis (CS) portfolio. It is estimated to contribute as much as 40% of the company’s Custom Synthesis revenue and account for nearly 20% of the consolidated topline. Post this, brokerage firm IIFL had warned of material risk to Divi’s earnings.
Of the 30 analysts that have coverage on the stock, 11 have a “buy” rating, six have a “hold” rating and 13 have a “sell” rating.
Divi’s Laboratories shares were up 2% at ₹6,148 apiece around 9.35 am on Friday. It has declined 7.3% in the past month.
Also Read: R Systems shares jump 12% after ₹400 crore acquisition of Novigo Solutions
