Pharma Stocks Rally as Divi’s, Sai Life, Gland Pharma Hit Record Highs

Pharmaceutical shares experienced a notable surge in Monday’s trading session, driven primarily by impressive second-quarter financial results. Companies specializing in Contract Development and Manufacturing Organization (CDMO) services and contract manufacturing led the gains, reflecting optimism in the sector.

Among the most active were Divi’s Laboratories, Laurus Labs, Sai Life Sciences, Gland Pharma, Mankind Pharma, and Glenmark Pharmaceuticals. These stocks rallied between 5 and 9 percent during intraday trading on the National Stock Exchange (NSE). Notably, Divi’s Labs, Laurus Labs, Sai Life Sciences, and Glenmark Pharmaceuticals reached their highest-ever share prices in this session.

Since October 23, 2026, these four companies have recorded substantial gains, with their stocks appreciating between 18 and 25 percent over the past 12 trading days. This outpaced the Nifty Pharma index’s 15.4 percent rise during the same period, underscoring the strong momentum in these individual names.

The Nifty Pharma index itself hit a fresh peak at 29,224.85 points, climbing 3 percent intraday and marking its sixth consecutive day of gains. Over the recent trading period, the pharma index has increased by 8 percent compared to a 6 percent rise in the broader Nifty 50 index. As of 11:24 AM on Monday, the Nifty Pharma index was up 1.55 percent, while the Nifty 50 declined by 0.30 percent, highlighting the sector’s relative strength.

Brokerage houses have responded positively to the earnings reports, raising price targets and maintaining buy recommendations on key stocks. Jefferies, in particular, expressed confidence in Divi’s Laboratories and Sai Life Sciences, setting target prices of ₹12,550 and ₹2,050 respectively.

Jefferies analysts noted that Divi’s Q2FY27 earnings surpassed expectations due to robust performance across all three of its divisions. The CDMO segment posted a 50 percent year-on-year growth, while the generics business grew by 18 percent, marking a multi-year high. The company’s EBITDA margin reached its strongest level since the COVID-19 pandemic began. These results were supported by validation batches and several programs nearing commercial production.

For Sai Life Sciences, Q2FY27 also delivered a strong beat against estimates, fueled by healthy growth in both its Clinical Research Organization and CDMO business units. The company’s pipeline showed progress, with one molecule advancing to the commercial phase and another entering phase 3 clinical trials. Sai Life anticipates that a strategic partnership with a major pharmaceutical client will begin functioning from the December 2026 quarter. The new capacity expansion is in the final commissioning stages. Jefferies has raised its earnings per share estimates for FY27 through FY29 by 3 to 19 percent and retained a buy rating with an increased price target of ₹2,050.

Choice Institutional Equities highlighted Laurus Labs’ ongoing transformation from an active pharmaceutical ingredient manufacturer to a more integrated CDMO platform. They expect the CDMO segment, including synthesis and biologics, to become the primary growth driver, increasing its revenue contribution from 30 percent in FY26 to 50 percent by FY29. Laurus has around 125 active projects and is progressing peptide commercialization. Analysts predict an EBITDA margin improvement to 30 percent in FY27, a 300 basis point increase year over year. Due to recent margin gains, Choice Institutional raised their FY27 and FY28 EBITDA estimates by approximately 20 and 21 percent respectively, revising the price target to ₹2,500 and maintaining an ‘ADD’ rating.

Gland Pharma also reported strong Q2FY27 results, surpassing expectations despite price pressures in its base business. Higher volumes helped offset these challenges. However, Cenexi, a subsidiary, posted an EBITDA loss due to planned annual shutdowns. Management reaffirmed positive full-year EBITDA guidance, citing improved capacity utilization, workforce optimization, and contract renegotiations. A capital expenditure plan exceeding ₹3,000 crore over the next five years was announced to increase capacity, as current facilities operate at 80 to 90 percent utilization.

The company aims to achieve a compound annual growth rate of 18 to 20 percent over the next three to four years, driven by complex molecule execution. Recent contract wins include a collaboration with Neuland for sterile active pharmaceutical ingredients and a new CDMO partnership with a global specialty pharma company targeting oncology and non-oncology products. Gland Pharma currently has capacity for 40 million GLP-1 fill-finish cartridges and plans to expand this to 140 million units. ICICI Securities described these developments as positive indicators for the company’s future outlook.

These strong performances and optimistic forecasts reflect ongoing confidence in the pharmaceutical sector, which continues to benefit from increasing demand for CDMO services, innovative drug development, and strategic partnerships. The sector’s resilience amid broader market fluctuations highlights its role as a key contributor to India’s growing pharmaceutical industry.

Disclaimer: The views and projections cited in this article belong to the respective brokerage firms and analysts. They do not represent the opinions of Business Standard. Readers should exercise their own judgment when considering investment decisions.