Q4FY23 Preview: Divi’s Laboratories: Revenue seen at Rs. 17,448 million, PAT at Rs. 3,554 million

18 May 2023 , 10:15 AM

Result date: 20^th May, 2023

Recommendation: Reduce

Target price: Rs. 2,700

Q4 will be another weak quarter for Divi’s, as base business trends remain muted. Analysts at IIFL Capital Services have factored in 2% sequential revenue growth for Divi’s in the quarter (although revenue will decline 31% over the year ago quarter). Molnu contributed $110 million revenue in Q4FY22 and will be nil in Q4FY23. They expect the company’s EBITDA margin to normalize from 24% in Q3 to 29% in Q4.

Analysts at IIFL Capital Services foresee the highest risk of consensus earnings downgrades for Divi’s Laboratories (Divi’s), and three other pharma companies. Their FY24/25 EPS estimates for these companies are 10-12% below consensus expectations. 

For Q4, the company’s Profit After Tax (PAT) could grow 16% sequentially (decline 60% over the year-ago quarter).

	March 2023 estimates	YoY change	QoQ change
Revenue (Rs. mn)	17,448	(30.7)%	2.2%
EBITDA (Rs. mn)	5,060	(54.2)%	23.9%
EBITDA margin (%)	29.0%	(1,485) bps	509 bps
Profit After Tax (Rs. mn)	3,554	(60.3)%	15.9%

Source: IIFL Research