India’s pharmaceutical sector has been in the spotlight for global investors, and one stock that continues to attract attention is Divi’s Laboratories. Recently, brokerage firm Nuvama Institutional Equities reaffirmed its ‘Buy’ rating on Divi’s Labs, setting a target price of ₹7,110. This implies an upside potential of nearly 15% from current levels, making the stock one to watch closely in the healthcare and pharma space.
So, what’s driving this positive outlook? Nuvama has identified three major reasons that could fuel Divi’s growth in the coming years — ranging from global partnerships to revenue opportunities. Let’s break it down.
1. A Big Opportunity with Eli Lilly’s Breakthrough Drug
One of the strongest Nuvama growth drivers for Divi’s Laboratories comes from its long-standing partnership with Eli Lilly, the American pharmaceutical giant. Eli Lilly recently achieved successful trial results for its much-anticipated oral GLP-1 drug, Orforglipron. The company is now preparing to submit this drug for regulatory approvals across key global markets.
Why is this drug so important? Orforglipron is designed to treat obesity and diabetes, conditions that affect over 1 billion people worldwide. Unlike injectable GLP-1 therapies that are costly and less accessible, Orforglipron — being an oral formulation — has the potential to reach a much larger patient population at lower costs.
While Orforglipron belongs to Eli Lilly, Divi’s Laboratories plays a critical role as a key manufacturing partner. The Indian pharma company is one of the main suppliers of peptide fragments and intermediates that are essential in producing Eli Lilly’s anti-obesity and diabetes drugs, including Tirzepatide and now Orforglipron.
This strategic role positions Divi’s to benefit significantly from the Nuvama global launch and adoption of the drug.
2. Expanding Role in Orforglipron Ingredient Manufacturing
According to Nuvama, Divi’s Laboratories is already working on 2–3 crucial ingredients of Orforglipron. The company has set up a dedicated capacity to cater to Eli Lilly’s requirements. Although the initial capacity is relatively small, there is a clear roadmap for multi-fold expansion depending on the demand curve once the drug enters the market.
Industry estimates suggest that the contract manufacturing opportunity (CMO) for Orforglipron could be worth $500 million–$1 billion at peak. This is a huge addressable market for Divi’s, which has a track record of scaling its facilities efficiently while maintaining high-quality standards.
As injectable GLP-1 therapies remain unaffordable for the masses, the introduction of Orforglipron in tablet form is expected to be a game-changer. It opens a large revenue stream for manufacturing partners like Divi’s, which are well-positioned to supply the active ingredients needed for production.
3. Revenue Growth Potential: $60 Million to $300 Million
Nuvama has also highlighted the revenue potential from this new drug opportunity. Based on Divi’s current setup, the company could generate $60 million in revenue from Orforglipron in its initial phase. However, with capacity expansion and rising global demand, revenues could potentially scale up to $200–300 million at peak levels.
That said, the brokerage also cautioned that the timing and exact size of this opportunity remain uncertain. Much will depend on regulatory approvals, competitive launches, and how fast Eli Lilly rolls out the product across international markets. Nuvama expects meaningful revenue contribution to begin only from the second half of FY26.
Divi’s Laboratories: Stock Performance in Focus
Nuvama From a market performance perspective, Divi’s Laboratories has shown mixed results in recent months:
- In the last five trading sessions, the stock gained around 0.3%, showing resilience amid market volatility.
- Over the past month, however, the stock fell by 7%, reflecting short-term selling pressure.
- In contrast, the six-month performance shows a 12% gain, while the one-year return stands at a solid 22%, rewarding long-term investors.
The stock’s fundamental story remains strong, supported by global partnerships and a robust pipeline of opportunities in the pharma outsourcing space.
Why Investors Are Watching Closely
The optimism around Divi’s Laboratories is not without reason. The company is known for its expertise in API (Active Pharmaceutical Ingredients) manufacturing, strong global partnerships, and debt-free balance sheet. With global pharmaceutical companies increasingly outsourcing manufacturing to cost-efficient and reliable partners, Indian companies like Divi’s are set to benefit.
The potential success of Orforglipron could mark another milestone for Divi’s, similar to how earlier collaborations helped the company scale new heights. Investors who believe in the long-term growth story of healthcare and lifestyle-related drugs are keeping a close eye on this opportunity.
Final Takeaway
Nuvama’s analysis suggests that Divi’s Laboratories has the potential to deliver up to 15% upside in the near term, driven by three main factors:
- Partnership with Eli Lilly and its blockbuster obesity and diabetes drug pipeline.
- Strategic involvement in Orforglipron’s key ingredients, with scope for significant expansion.
- Revenue visibility of $200–300 million at peak capacity, beginning as early as FY26.
While there are uncertainties regarding timelines, the overall outlook for Divi’s remains positive. For investors looking at pharma stocks with global exposure, Divi’s Laboratories stands out as a strong candidate.
Disclaimer : This article is for informational purposes only and should not be considered financial or investment advice. Readers are encouraged to consult with a professional financial advisor before making any investment decisions.
