Jefferies keeps ‘Buy’ on Divi’s Labs, sees 27% upside after Q1 margins hit a four-year high
AI Market Summary
Divi's Labs reported a strong Q1 FY27 with revenue up 28% YoY and EBITDA/PAT far above consensus, lifting EBITDA margin past 40% for the first time in 16 quarters. Mix shift toward higher-margin custom synthesis, favorable FX translation, and ramping validation for capacity-expansion projects underpin profitability. Jefferies raised EPS estimates and valuation assumptions, reinforcing positive near-term sentiment toward the company's earnings quality and contract pipeline.
Impact level
● Low
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AI Insight · NCCOGOLD2USD/USDTAI Insight
▲ Bullish
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Divi’s Labs reported Q1 results for the period through June 2026, with revenue of Rs 3080 crore, up 28% year on year. EBITDA rose 72% to Rs 1255 crore and net profit climbed 66% to Rs 900 crore, all well ahead of Jefferies’ expectations. EBITDA margin moved above 40% to the highest level in nearly four years, while gross margin reached 68%, close to its peak.
