Divi's Laboratories Ltd. share price target

The strong growth was led by the custom synthesis division most likely due to higher than expected revenues from Molnupiravir. API segment continues its weak performance due to intense pricing pressures.

Robust standalone Q4 revenue/EBITDA growth of 45%/57% YoY, ahead of consensus by 11%/17%

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,...