Q1FY24 Preview: Divi’s Laboratories: Revenue seen at Rs. 20,470 million, PAT at Rs. 4,378 million

10 Aug 2023 , 02:09 PM

Result date: 14^th August, 2023

Recommendation: Reduce 

Target price: Rs. 2,750  

Divi’s Laboratories (Divi’s) could register decline in revenue as compared to the year-ago quarter, largely due to a high Molnupiravir-led base. Compared to ~US$60 million sales in Q1FY23, analysts at IIFL Capital Services estimate nil Molnupiravir sales by Divi’s in the June 2023 quarter. This will lead to a decline in revenue as well as profit numbers for the company as compared to the year-ago quarter.

Excluding Molnupiravir, though overall sales and CSM sales could each grow in mid-double digit over the year-ago quarter.

Sequential performance though is likely to be steady. CSM sales would get a leg up from initial traction from the Gadolinium based contrast media project. Sequentially, EBITDA margin should benefit from stable input cost inflation and discontinuation of high-cost inventory.

The company’s Profit After Tax (PAT) could fall 38% over the year-ago quarter and grow 36% sequentially.

Rs. Million	June 2023 estimates	QoQ change	YoY change
Revenue	20,470	5%	(9)%
EBITDA	6,243	27%	(26)%
EBITDA margin	30.5%	529 bps	(706) bps
Profit After Tax	4,378	36%	(38)%

Source: IIFL Research