Q3FY24 Preview: Divi’s Laboratories: Revenue seen at ₹20,150 Million, PAT at ₹4,256 Million

8 Feb 2024 , 03:19 PM

Result date: February 10, 2024

Recommendation: Reduce

Target price: ₹3,160

Analysts at IIFL Capital Services believe Divi’s Laboratories could post revenue growth of 6% sequentially and 18% over the year-ago quarter. This will be driven by 4/9% sequential revenue growth in the Generic/CS segment, as the CS segment is likely to benefit from the fast-track Contrast Media project (Iopromide). 

Analysts at IIFL Capital Services have also factored-in the company’s EBITDA margins to improve ~340 basis points sequentially to 29.5%, driven by sequential growth in the CS segment and stabilization in raw material prices. They expect nil contribution from Molnu in Q3FY24 versus $2mn in the year-ago quarter. 

Profit After Tax or PAT could improve 39% over the year-ago quarter and 16% sequentially.

Important management insights to watch out for:

• Update on approvals for additional capacity
• Commissioning of additional lines in custom synthesis capex
• Progress towards manufacturing 10 new molecules

₹ Million	December 2023 estimates	YoY change	QoQ change
Revenue	20,150	18.0%	5.6%
Generic revenue*	11,863	15.8%	3.6%
CS	8,287	21.3%	8.5%
EBITDA	5,944	45.6%	19.1%
EBITDA margin	29.5%	559 bps	336 bps
Profit After Tax	4,256	38.7%	15.7%

Source: IIFL Research