Pharmaceutical company Divi’s Laboratories Limited has received a draft assessment order from the Income Tax Authority proposing additions and disallowances of ₹570.51 crore to its returned income for FY2022–23 (assessment year 2023–24).

The draft order, issued under Section 144C(1) of the Income Tax Act, 1961, was dated March 20 and received by the company the following day. It was issued by the Assistant Commissioner of Income Tax, Central Circle-2(1), Hyderabad.

Transfer Pricing Adjustments Drive Proposed Additions

According to the company, the proposed additions primarily relate to transfer pricing adjustments on specified domestic transactions, along with corporate tax adjustments.

The upward revision in taxable income could result in an additional income tax liability, the company said in its regulatory filing.

The draft order also indicates that penalty proceedings under Section 270A of the Income Tax Act will be initiated separately for alleged under-reporting of income related to the proposed additions.

Divi’s Laboratories stated that it is currently evaluating the draft order and intends to file an appeal before the appropriate authority within the stipulated timeline.

Quarterly Performance Shows Mixed Trends

Separately, Divi’s Laboratories Limited reported a net profit of ₹583 crore for the December quarter, marking a 1 percent decline year-on-year from ₹589 crore and falling below market estimates of ₹640 crore.

Revenue for the quarter rose 12.3 percent year-on-year to ₹2,604 crore, compared with ₹2,319 crore in the same period last year. However, this also came in below market expectations of ₹2,680 crore.

At the operating level, performance remained strong. EBITDA increased 19.8 percent year-on-year to ₹890 crore, surpassing estimates of ₹855 crore.

EBITDA margin expanded to 34.2 percent, compared with 32 percent a year earlier and 32.7 percent in the previous quarter, significantly ahead of market expectations of 31.9 percent.

On a sequential basis, revenue declined 4.1 percent quarter-on-quarter, while profit fell 15.4 percent, reflecting some moderation in quarterly momentum. Despite this, management indicated that operational metrics improved, and long-term growth drivers remain intact.

Stock Performance

Shares of Divi’s Laboratories Limited ended the session at ₹6,109.55, rising ₹131.95, or 2.21 percent, on the Bombay Stock Exchange.