Divi's Laboratories Ltd. share price target

by higher sales from Molnupiravir. We believe efforts on backward better margins. Divi's remains preferred play on Indian CRAMS and API given its strong execution track record. Company also enjoys strong margins and return ratios. We maintain our estimates and maintain Accumulate' rating...

Total Revenue stood at Rs 1987.51 Cr for Q2FY22, registering a growth of 13.6% YoY. Profit for the period increased 16.7% YoY to Rs. 606.46 Cr. Operating Margins slightly weak at 51.9% in Q2FY22 against 52.5% in corresponding period last year. Cash flow from Operations stood at Rs. 557.22 Cr in H1FY22. The company completed debottlenecking and expansion of plants which got delayed due to the pandemic. However, rising raw material prices and...

2,676.35 crore as of 30 September 2021 from Rs 1,699.37 crore as of 30 September 2020. Sundry debtors were higher at Rs 1,852.26 crore as of 30 September 2021 compared to Rs 1,572.76 crore as of 30 September 2020. Cash and bank balance rose to Rs 1,879.76 crore as of 30 September 2021 from Rs 1,869.08 crore as of 30 September 2020. Investments stood at...

Divi’s Laboratories’ (Divis) reported Q2FY22 performance was below our estimates. Consolidated revenue grew 13.6% YoY to Rs19.9bn (I-Sec: Rs20.9bn), EBITDA margin dropped 120bps YoY to 41.2% (I-Sec: 42.5%) and PAT grew 16.7% to Rs6.1bn (I-Sec: Rs6.3bn). The growth was driven primarily by custom synthesis business while generics declined YoY.

DIVI delivered in line 2QFY22 earnings led by strong offtake in the Custom Synthesis (CS) segment and ramp up in the Nutraceuticals segment. It has enough capacity to cater to upcoming demand of Molnupiravir. We reduce our FY22E/FY23E EPS estimate by 5%/2% to factor in moderation in Generic API prospects over the near to medium term and increased OPEX related to expanded capacity. We roll our TP for 12-months forward earnings and continue to value DIVI at 36x to arrive at TP of INR6,050. We remain positive on DIVI on the back of: a) strong demand in the CS segment,...

Other income rose 107.56% to Rs 35.97 crore. Provision for interest rose 21.74% to Rs 0.28 crore. Provision for depreciation rose 30.36% to Rs 73.26 crore. Profit before tax grew 23.22% to Rs 814.48 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 257.37 crore, compared to Rs 168.92 crore. Effective tax rate was 31.60% compared to 25.56%. Minority interest was nil in both the...

Divi's Laboratories Limited is engaged in manufacturing and selling of generic active pharmaceutical ingredients (APIs) and intermediates for the United States, Asia, Europe, and internationally. Its manufacturing and research and development facilities are located in the State of Andhra...

Revenues grew 13% YoY to INR19.6b (our est: INR19.9b) for the quarter. The gross margin expanded 420bp YoY to 67.2%. This was largely owing to a superior product mix and lower raw material costs. The EBITDA margin expanded at a lower rate of 300bp YoY to 43.5% (our est: 40.9%) due to higher employee costs (+60bps as a percentage of sales) and other expenses (+60bps as a percentage of sales) EBITDA was up 22% to INR8.5b (our est: INR8.1b) for the quarter YoY. Adjusted for INR196m in forex gains, PAT grew at a lower rate of 13% YoY to...