Divi’s Labs Shares Dip After Patent Loss: SEBI RA Recommends Buy On Dips

Divi’s Laboratories came under pressure on Monday following a key negative development around a blockbuster cardiac drug.

SEBI-registered analyst Prabhat Mittal said Divi’s made an intraday low of ₹6,545 after a gap-down open and was trading nearly 2% lower from Friday’s close. 

He noted that on the medium-term chart, the stock had earlier faced multiple resistance points around ₹6,250–₹6,300 before breaking out and forming higher highs. 

It has since taken support near the ₹6,500 zone.

At the time of writing, shares of Divi’s Laboratories were trading at ₹6,727, down 1.6% on the day.

Mittal recommended traders consider buying at the current market price of ₹6,660, with a strict stop-loss at ₹6,450 and upside targets of ₹7,070 and ₹7,270.

The weakness follows news that MSN Laboratories has won a U.S. patent litigation against Novartis over Entresto, potentially clearing the way for a generic launch starting July 15. 

Entresto’s API is believed to be the largest product in Divi’s innovator Custom Synthesis portfolio, estimated to contribute around 40% of the segment’s revenue and nearly 20% of the company’s consolidated topline. Brokerage IIFL said the development could cause a 12–13% drop in Divi’s annual EBITDA. 

It noted that Divi’s is currently trading at a lofty FY27 EPS multiple of 58x and 40x FY27 core profit, reflecting high investor optimism around its GLP-1 and CDMO businesses. 

However, IIFL warned that the Entresto patent cliff poses a material near-term earnings risk. The brokerage has maintained a ‘reduce’ rating on the stock with a target price of ₹5,465, implying a potential downside of about 20% from current levels.

On Stocktwits, retail sentiment was ‘bullish’ amid ‘normal’ message volume.

The stock has risen 10.8% so far in 2025.

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