Q2FY23 Preview: Divi's Laboratories: Revenue seen at Rs21,634 million, PAT at Rs5,957 million

7 Nov 2022 , 10:29 AM

Result date: 7^th November, 2022
Recommendation: Reduce
Target price: Rs3,350
(Source: IIFL Research)
 
Divi’s Laboratories’ results for the September 2022 quarter could be affected by a high base and continued margin pressure. The company’s generics business could grow over the year-ago quarter and witness continued traction. Enhanced supply opportunity led by Chinese supply chain replacement, COVID (continued Molnupiravir) and expanded capacity are likely to be key drivers of revenue.

EBITDA margin could reflect the impact of high operating costs (energy, logistics and raw material).

Pressure on margin could pull down the company’s Profit After Tax (PAT) by 2.35% over the year-ago quarter.

Important management insights to watch out for:

• Outlook on margins

• Growth in custom synthesis

Rs. Million	September 2022 estimates	QoQ change	YoY change
Revenue	21,634	(4.15)%	8.65%
EBITDA	8,269	(2.15)%	0.50%
Profit After Tax	5,957	(12.10)%	(2.35)%

Source: Brokerage Reports