DIVI reported healthy revenue growth of 8% YoY and 17% QoQ in 3QFY18 to INR10.4b (v/s our estimate of INR9.9b). It has reported revenue growth after three quarters due to regulatory issues at its Unit-II, which have now been resolved. EBITDA declined ~14% YoY but grew ~18% QoQ to INR3.3b. Margin declined 790bp YoY (flat QoQ) to 31.4%. PAT declined 16.3% (grew 9%QoQ) to INR2.2b, ~3% below our estimate. DIVI incurred forex loss of INR160m, adjusting for which margin would have been ~33%. It incurred remediation cost of INR140m, which is expected to decline to INR50m-60m in 4QFY18. Remediation cost will not be incurred from FY19. We expect EBITDA margin to improve by ~400bp to ~36%, with no remediation expenses from next fiscal.