Divis Laboratories Ltd

AGM details

• AGM held on 10 August 2026 at 10:00 AM via VC/OAVM.
• Record date: 03 August 2026; meeting concluded at 11:26 AM.
• Attendance: 150 members representing 12,42,61,211 shares via VC.

Key resolutions

• Ordinary: Adopt audited standalone and consolidated financial statements for FY 2025-26.
• Ordinary: Declare dividend of ₹30 per equity share (1,500%).
• Ordinary: Re-appoint N.V. Ramana as director; retires by rotation.
• Ordinary: Re-appoint Dr. Kiran S. Divi as director; retires by rotation.

Dividend

• Dividend of ₹30 per equity share approved; total payout ₹796.41 crore.

Director changes

• N.V. Ramana re-appointed; retires by rotation.
• Dr. Kiran S. Divi re-appointed; retires by rotation.

Voting results

• Res. 1 passed; ~99.95% in favour.
• Res. 2 passed; ~99% in favour.
• Res. 3 passed; ~99% in favour.
• Res. 4 passed; ~99% in favour.

Auditor

• Statutory auditors attended; no change announced.

Financial Performance

• Consolidated total income of ₹3,144 crores in Q1 FY27.
• PBT ₹1,180 crores; PAT ₹902 crores.
• Standalone income ₹3,037 crores; PBT ₹1,165 crores; PAT ₹891 crores.
• Standalone revenue grew 10% on a constant currency basis.
• Exports continued to account for approximately 90% of standalone revenue.
• Europe and North America accounted for 75% of our exports.
• Custom Synthesis revenue share 60%; Generics 40%.
• Nutraceutical revenue ₹298 crores in the quarter; prior year ₹250 crores.
• Capital work in progress ₹2,034 crores.
• Capitalized assets ₹451 crores.
• Cash and cash equivalents ₹3,611 crores.
• Trade receivables ₹3,056 crores; Inventory ₹4,413 crores.

Operations and Environment

• External environment remained challenging; West Asia uncertainty affected procurement strategies.
• Material availability largely stable; solvent costs remained elevated.
• Rolling 3-month inventory policy to secure supply; production stoppages avoided.
• Backward integration via Unit-3 enhances supply of critical intermediates.
• Peptide capacity expansion with multiple 3,000 L SPPS lines planned.
• CSR programs reached more than 1.8 million beneficiaries in 2026.
• Three major capex programs nearing completion; validations ongoing.

Balance Sheet and Cash Flow

• Cash and cash equivalents at ₹3,611 crores.
• Trade receivables ₹3,056 crores; inventory ₹4,413 crores.
• Capital work in progress ₹2,034 crores.
• Assets capitalized ₹451 crores in the quarter.

Capex and Projects

• Three major capex projects totaling about ₹2,000 crores; ~70% capitalized.
• Validations completed; commercial quantities will commence after regulatory approvals; CDAs restrict sharing.
• Unit-3 supports backward integration; Kakinada enables pre-chemistry work.
• Peptide capacity expansion with several 3,000 L SPPS lines.
• Three capex programs nearing completion; transfer of activities in line with planning.

Outlook and Guidance

• Double-digit growth for FY27; updates to follow as validations progress.

Q&A Highlights

• Validation-to-commercial ramp depends on approvals; quantities undisclosed due to confidentiality.
• Generic pricing affected by raw material costs; prices raised where viable.
• Gadolinium remains in Phase II/III qualification; no full validations confirmed.
• Iodine contrast media: long-term contracts; one commercialization started; second due soon.
• Approximately 18–20 Custom Synthesis projects are commercialized or in commercialization.
• Peptide expansion and integrated model give competitive supply advantages.
• Utilization across all three units is around 85%.

Risks and Watchpoints

• Geopolitical risk in West Asia could affect supply chain and costs.
• Regulatory approvals timing can impact project ramp and margins.

Retirements of Senior Management Personnel

• Mr. L. Ramesh Babu, Vice President (Procurement), retires effective July 31, 2026.
• Mr. D. Madhu Babu, Vice President (Projects), retires effective July 31, 2026.
• Cessation as Senior Management Personnel due to retirement.

Meeting Details

• Board meeting scheduled for August 1, 2026; time and venue not disclosed.

Key Agenda Items

• Approval of unaudited standalone and consolidated financial results for quarter ended June 30, 2026.

Other Notes

• Trading window closed from July 1, 2026 to 48 hours post-results (Aug 3, 2026).

AGM details

• AGM date/time/mode: Aug 10, 2026 at 10:00 a.m. IST via VC/OAVM.
• Deemed venue: registered office.
• Proxy facility not available due to VC/OAVM; attendance via VC/OAVM only.

Dividend & record date

• Dividend proposed: ₹30 per equity share.
• Record date: 24 July 2026.
• Payment date (if approved): 14 August 2026.

Resolutions proposed

• Adopt audited standalone and consolidated financial statements and reports.
• Declare dividend for FY2025-26.
• Re-appoint N.V. Ramana as Director; retires by rotation.
• Re-appoint Dr. Kiran S. Divi as Director; retires by rotation.

Voting & results

• Remote e-voting window: 9:00 a.m. on Aug 6, 2026 to 5:00 p.m. on Aug 9, 2026.
• Results to be declared within two working days; posted on company and Kfintech websites and stock exchanges.

Director changes

• Ramana to be re-appointed as Director; retires by rotation; five-year tenure from Dec 2024; last remuneration ₹51.20 Cr.
• Dr. Kiran S. Divi to be re-appointed as Director; five-year tenure from Apr 2025; last remuneration ₹34.84 Cr.

VC/OAVM format note

• VC/OAVM format in effect; proxy not available.

Overview

• Manufactures Active Pharmaceuticals Ingredients, Intermediates and Nutraceuticals, accounting for 100% turnover.
• BRSR disclosed on a standalone basis for FY2025-26.
• Exports comprise about 89% of turnover; serves 23 states and 80 countries.
• Domestic facilities: 4 manufacturing plants and 1 office; Unit 3 started January 2025.
• International presence includes 2 offices; no international plants.

Key ESG Risks & Opportunities

• OH&S risks mitigated by ISO 45001; incidents may incur costs.
• Water management risks mitigated with RO reuse and desalination; scarcity raises costs.
• Climate risks addressed via renewable energy and SBTi-approved near-term/net-zero targets.
• Waste management risks mitigated via recycling, reuse, and green chemistry.
• ISO 14001/45001 certifications underpin governance and risk mitigation.
• SBTi targets approved; near-term and net-zero; CFP verified.

Governance & Policy Highlights

• Risk Management and Sustainability Committee oversees ESG topics.
• Policies approved by Board; extend to value chain.
• Anti-corruption policy covers company and stakeholders.
• Whistle Blower Policy with web link.
• Code of Ethics and related policies approved by the Board.
• Bureau Veritas provides reasonable assurance on BRSR Core indicators.
• Compliant with all applicable laws; no penalties reported.

Social Responsibility & Workforce

• Total workforce: 12,119; permanent employees 11,514; female employees 1,719.
• LTIFR: employees 0.29; workers 0.34; no fatalities.
• Average Health & Safety training ~21 hours 50 minutes per person.
• Board gender diversity: 2 of 10 female directors.
• Return-to-work after parental leave: female permanent 88.70%; retention 75.37%.
• Differently abled: 17 employees; 10 workers.
• Grievance mechanisms: Whistle Blower policy and safety committees.
• CSR focus areas include health, education, drinking water, rural development and women empowerment.

Environmental Performance

• Total energy: 54,97,329 GJ; renewables contributed 85,133 GJ.
• GHG emissions: Scope 1 371,697 tCO2e; Scope 2 378,516 tCO2e.
• Scope 3 emissions: 1,200,799 tCO2e; intensity 0.00001156 MT CO2e/rupee turnover.
• Water: withdrawal 2,762,689 KL; consumption 3,655,825 KL.
• Water discharge: surface water 437,108 KL; to CETP 4,588 KL; total 445,907 KL.
• ZLD implemented at Unit-I; RO/STP water reused.

Stakeholder Engagement & Complaints

• Stakeholders: employees, customers, investors, suppliers, community, government.
• Engagement channels: email, website, meetings; frequency continuous or as required.
• Shareholders complaints: 102 filed; 0 pending; Customers 35 filed; 6 pending.
• Value chain assessments: ~54.52% of partners by value participated.
• Grievance mechanisms: policies accessible online; CSR activities engage communities.

Other Notable Metrics

• Affiliations with 7 trade associations.
• MSME inputs: 22.08%; domestic sourcing: 71.27%.
• Gross wages to females: 9.2% of total wages.
• Data privacy/cybersecurity: ISO 27001-aligned policies; no data breaches reported.
• BRSR core indicators assued by Bureau Veritas; 9 indicators covered.

Financial performance

• FY25-26 total income ₹10,894 crore; standalone PAT ₹2,607 crore; PBT ₹3,436 crore; EPS ₹98.19.
• Revenue growth 12.94% YoY; EBITDA ₹3,920 crore; EBITDA margin 35.98% of total income.
• Dividend ₹30 per share; total dividend ₹797 crore; payout 31% of PAT.
• Equity share capital ₹53 crore; net worth ₹16,711 crore.
• No long-term borrowings; net debt position nil.
• Cash from operations ₹2,711 crore; capex ₹2,519 crore; CWIP ₹2,113 crore.
• Single operating segment; 89% of revenue from exports.
• Geography mix: Europe 60.82%, North America 13.10%, Asia 10.40%, India 11.06%, Rest of World 4.62%.
• Consolidated PAT ₹2,568 crore; standalone PAT ₹2,607 crore.

Growth & capex

• Unit 3, Kakinada backward integration expanded; six blocks operational, two under construction.
• Three major capex programs progressing with long-term supply commitments.
• Peptide Centre of Excellence established; expanding capabilities in peptides.
• Backward integration frees GMP capacity at Units 1 and 2 for high-value products.
• Capex across Units 1-3 expected to contribute in 12–24 months.

ESG highlights

• SBTi-approved Near-Term and Net-Zero targets; FY26 progress: ~13,500 tCO2e reduced.
• Water: conserved ~1,59,500 KL; 30% groundwater intake reduction by 2030; 25% overall water improvement.
• Energy: conserved ~8,290 GJ; LT capacitor banks and VRV AC; green chemistry initiatives.
• Waste management: plastic packaging waste down ~46 MT; total waste managed with recycling/reuse.
• EHS: zero major incidents; LTIs 0.14; average EHS training 22 hours; 42.5 million safe man-hours.
• Board diversity: 20% women on Board; 50% independent Directors; 100% board meeting attendance.
• Awards: International Safety Award 2026; CDP score 'B'.
• Nutraceuticals: world’s largest manufacturer of 10 key APIs; strong export network.

Governance & board

• Board: 10 directors; 5 Executive, 5 Independent; 2 women.
• MD: Dr Murali K. Divi; CEO: Dr Kiran S. Divi; both on Board.
• Four Board meetings in FY25-26; 100% attendance.
• Audit Committee: four meetings; Chair K.V. Chowdary; independent oversight maintained.
• NRC: four meetings; Chair Prof. Ganapaty.
• SRC: one meeting; chaired by Dr Ramesh B.V. Nimmagadda.
• CSR Committee: four meetings; policy linked to Schedule VII of the Companies Act.
• Unmodified audit opinions; robust internal controls; secretarial audit by V. Bhaskara Rao & Co.
• Related party transactions reviewed and approved at arm’s length; disclosures as per policy.

Dividend & capital allocation

• Dividend ₹30 per share; record date 24 July 2026; payment after AGM (on/after 14 Aug 2026).
• Total dividend ₹797 crore; 31% payout of standalone PAT.
• Dividend distribution policy available on company website.
• No transfer to General Reserve; disciplined capital allocation; ongoing capex programs.

Regulatory & risk

• US FDA general cGMP inspection at Unit 1 completed; no adverse findings.
• BRSR core indicators assurance provided by Bureau Veritas; scope: 9 core indicators.
• Secretarial audit: no non-compliances; certificate of non-disqualification obtained.
• No penalties or regulatory actions of materiality in last three years.

People & employment

• Workforce: ~19,300 employees; ~9% female.
• Return-to-work rate for new mothers: 88.70%; retention: 75.37%.
• Employee health & safety: ISO 45001/ISO 14001 certified; average 22 hours EHS training.
• Ergonomic, GMP and quality training embedded; strong focus on learning and development.

Outlook & industry context

• Global CDMO market valued at ~USD 150B in 2024; projected to USD 290-300B by 2030s.
• India positioned as a key CDMO hub; policy incentives (PLI, PRIP) to boost R&D and manufacturing.
• HPAPIs and peptide therapeutics growth; GLP-1 therapies reshape demand patterns.
• Divi’s strategy: lifecycle-integrated outsourcing, backward integration, and disciplined execution.

Dematerialisation status

• Securities for dematerialisation were confirmed to the depositories by the registrar.
• The dematerialised securities have been listed on the stock exchanges.
• Physical certificates for dematerialisation were mutilated and cancelled after verification; depository named as registered owner within 15 days.