Divis Labs rallies 13% in 1 week; What's driving pharma stock?

Divis stock gained 2% in Monday's intra-day deals. Reports suggest the company is well positioned to benefit from emerging trends across both API and CDMO domains through innovation and capex.

Divis Laboratories share price today

 

Shares of Divis Laboratories were up 2 per cent at ₹6,579.90 on the BSE in Monday’s intra-day trade in an otherwise weak market, In the past one week, the stock price of the pharma company has rallied 13 per cent.  Meanwhile, as per reports, the US Senate has approved the National Defense Authorization Act, incorporating an amended version of the US Biosecure Act.The legislation seeks to curb investments in sensitive Chinese sectors and protect American biotech and health data from foreign risks, especially those linked to China, while also reducing US reliance on overseas laboratories and suppliers.

 

At 10:11 AM; Divis Labs share was quoting 1 per cent higher at ₹6,551.30, as compared to 0.37 per cent decline in the BSE Sensex. It was trading at its highest level since August 1, 2025. The stock price of the pharmaceutical company had hit a 52-week high of ₹7,077.70 on July 8, 2025.  CATCH STOCK MARKET LIVE UPDATES TODAY

What's driving this pharma stock?

 

According to ICICI Securities, the bill still has to get passed in the US House of Representatives and by the President. The revised version addresses the concerns raised for the earlier avatar as it drops specific company names and insufficient protection for the due process. 

 

Instead, it empowers the US government to maintain an updated list of restricted firms published by the US Department of Defense (DoD) as a Chinese military company operating in the US. 

 

Despite its complex nature and implementation process, it reiterates the risks of full-time engagement with the Chinese firms. This could pave the way for incremental outsourcing to Indian Contract Development and Manufacturing Organization (CDMO) players in the long run. The brokerage firm expects Divi's Labs, Piramal Pharma, Laurus Labs, and Syngene among others to be long term beneficiaries.  ALSO READ | JM Financial cuts Suzlon Energy target on execution hurdles; retains 'Buy' 

Meanwhile, within the CDMO segments for companies under Kotak Institutional Equities coverage, the brokerage firm expects strong year-on-year (YoY) growth in September 2025 quarter (Q2FY26) for Divis, Laurus and Sai, while analysts expect a muted quarter for Syngene and Piramal Pharma, largely due to inventory destocking for their key molecules.

 

Analysts at Kotak Institutional Equities for Divis Labs expect generic active pharmaceutical ingredients (APIs) to grow 9 per cent yoy (+8 per cent QoQ) in Q2FY26. Despite the entry of generics in Entresto, the brokerage firm expects continued traction in CSM with 11 per cent YoY growth (+7 per cent QoQ) in Q2FY26. For the nutraceuticals segment, analysts said they factor in 10 per cent YoY growth. Accordingly, the brokerage firm expects Divi's to report overall sales growth of 10 per cent YoY (+7 per cent QoQ) in Q2FY26.

 

“We expect Divi's gross margins to improve 60 bps QoQ to 61.2 per cent. We expect Divi's overall Q2FY26 EBITDA to grow 14 per cent YoY to ₹ 820 crore (+12 per cent QoQ), with EBITDA margins expanding 110 bps YoY to 31.7 per cent (+140 bps QoQ).", the brokerage firm said in its note.

 

Meanwhile, on future market scenario, Divis Labs in its FY25 annual report said that the outlook for the pharmaceutical industry in FY2025-26 is promising, albeit with its share of challenges. Divis is well positioned to benefit from emerging trends across both API and CDMO domains through ongoing process innovation, capacity expansion, and strategic investments.