We maintain NEUTRAL rating on the stock, with a revised TP of Rs 700 (16x Sep-19E). Divis Labs (DIVI) reported a muted performance in 2QFY18. Revenue for the quarter was Rs 8.9bn, (~4% below estimates), a decline of ~11% YoY, with the impact of the import alert continuing to be felt. Supply protocols for a plant under an import alert have resulted in slower output for DIVI. EBITDA came in at ~Rs 2.8bn, a margin of 31.1% (in-line with estimates). However, contrary to our expectations, there continued to be remediation costs during this quarter (~Rs 170mn), adjusted for which, the EBITDA margin would be ~33%, a ~190bps beat. PAT was ~Rs 2bn (down ~8% YoY), ~5% below estimates.