A director at Divis Laboratories Ltd sold 25,000 shares at 5,781.152INR and the significance rating of the trade was 69/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two yea...
The general evaluation of DIVIS LABORATORIES (IN), a company active in the Pharmaceuticals industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 1 out of 4 possible stars while its market behaviour can be considered as defensive. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Slightly Positive. As of the analysis date February 22, 2022, the closing price was I...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
Divi’s Laboratories: Backward integration benefits offset by higher opex related to compliance (DIVI IN, Mkt Cap USD7.3b, CMP INR1964, TP INR1845, 6% Downside, Neutral) Capex program on track DIVI is almost at the end of significant capacity expansion worth INR17b to cater to the increasing generics business and innovator's increased outsourcing. Lower Nutraceutical sales impacted DIVI's 3QFY20 performance; however, we believe that the company is well positioned to benefit from the CRAMS...
EM Breakout -- Add Exposure The laundry list of market characteristics consistent with historical bull markets continues to grow, helping support our ongoing belief that global equities are in the early stages of a broad-based advance. • US Dollar; EM Equities. The US dollar (DXY) exhibits signs of rolling over, something we outlined as increasingly likely in our 12/10/19 Int'l Macro Vision strategy. This is bullish for global equities -- especially EM -- and has paved the way for the MSCI E...
DIVI'S LABORATORIES: Sales impressive, higher RM cost hurts margins (DIVI IN, Mkt Cap USD6.3b, CMP INR1687, TP INR1655, 2% Downside, Neutral) Highest-ever quarterly revenue run-rate: DIVI's sales were up 9.2% YoY to INR14.5b (our estimate: INR13.5b) in 2QFY20, led by 13% YoY growth in the CRAMS segment (59% of sales) and supported by strong 43% YoY Nutraceutical sales to INR1.6b. However, Customer Synthesis segment grew moderately by 4% YoY (61% of sales), impacting overall growth. Change in...
DIVI'S LABORATORIES: Adverse macro situation for raw materials impacts profitability (DIVI IN, Mkt Cap USD6.2b, CMP INR1666, TP INR1590, 5% Downside, Neutral) Earnings growth moderates on higher raw material costs: 1QFY20 sales grew 17% YoY to INR11.6b (our est. INR13b). The company had healthy growth in the key segments of generics and custom synthesis (CS), driving the overall growth for the quarter. Nutraceutical sales came in at INR1b, growing at a moderate rate of 13% YoY for the qua...
Divi's Laboratories: Earnings growth on low base; capex benefits to reflect 2HFY21 onwards (DIVI IN, Mkt Cap USD6.7b, CMP INR1762, TP INR1590, 10% Downside, Neutral) Lower than expected performance across the board: 4QFY19 sales at INR12.5b (our est. INR13b) were up 15.5% YoY. Gross margin (GM) at 60% contracted 250bp/420bp YoY/QoQ due to increased share of generics (~59% v/s 55-56%) in total sales and higher raw material (RM) prices. RM prices have increased due to supply disruption in k...
Divi's Laboratories: Strong revenue growth, better operating leverage drives earnings (DIVI IN, Mkt Cap USD5.7b, CMP INR1530, TP INR1570, 1% Upside, Neutral) DIVI’s reported strong revenue growth of ~29% YoY to INR13.4b v/s our est. of INR12.2b, partly due to low base of last year. Gross margin expanded ~360bp YoY (+110bp QoQ) to 64.2%. EBITDA margin improved significantly by ~600bp YoY to 39% due to improvement in gross margin and better operating leverage. Employee cost increased at a...
Divi's Laboratories: Strong beat on earnings (DIVI IN, Mkt Cap USD4.5b, CMP INR1254, TP INR1390, 11% Upside, Neutral) Quarterly EBITDA highest in past 18 quarters: DIVI’s revenue grew significantly by ~44% YoY to INR12.9b (v/s est. of INR10.7b). The strong YoY growth was led by (a) normalization of operations post resolution of warning letter, and (b) opportunities due to slowdown in supplies from Chinese competitors. Superior product mix led gross margins to expand by ~330bp YoY (+150bp ...
Divi's Laboratories: Strong growth partly on low base; On track to improve profitability (DIVI IN,Mkt Cap USD4.7b, CMP INR1208, TP INR1270, 5% Upside, Neutral) Revenue growth and lower operational costs drive earnings: DIVI’s’ revenue grew 21% YoY to INR10b (our estimate of INR10.5b). The strong YoY growth came partly on the back of last year’s low base. The business slowdown at Unit-I due to compliance-related activities during the quarter impacted the growth to some extent. Gross margin e...
Divi's Laboratories: Margin surprises positively; charts expansion plan for coming years (DIVI IN, Mkt Cap USD4.8b, CMP INR1146, TP INR1200, 5% Upside, Neutral) DIVI’s 4QFY18 revenue grew by a muted ~2% YoY (+5% QoQ) to INR10.9b (est. of INR10.2b). Gross margin improved ~210bp YoY (~130bp QoQ) to 62.5%. This, along with a decline in other expenditure by ~180bp (as % of sales), led to margin expansion by ~180bp YoY to 35.5%. EBITDA rose ~8% YoY (+19% QoQ) to INR3.9b (est. of INR3.4b). PAT,...
Divi's Laboratories: Revenue improves sequentially; margin impacted by forex loss (DIVI IN, Mkt Cap USD4.7b, CMP INR1122, TP INR1100, 2% Downside, Buy) DIVI reported healthy revenue growth of 8% YoY and 17% QoQ in 3QFY18 to INR10.4b (v/s our estimate of INR9.9b). It has reported revenue growth after three quarters due to regulatory issues at its Unit-II, which have now been resolved. EBITDA declined ~14% YoY but grew ~18% QoQ to INR3.3b. Margin declined 790bp YoY (flat QoQ) to 31.4%. PAT ...
​Divi's Laboratories:Regulatory issues impact revenues(DIVI IN, Mkt Cap USD3.8b, CMP INR920, TP INR800, 13% Downside, Neutral)Revenue declined 10% YoY (~4% miss), while EBITDA of INR2.8b was ~8% below our estimate. Apart from loss of sales due to the import alert, lower volumes due to batch-by-batch testing at Unit-2 (for exempted product list) contributed to muted revenue performance. EBITDA margin contracted ~600bp YoY to 31.1% due to lower turnover, and remediation expense of ~INR170m relat...
​Divi's Laboratories: Unit-2 plant inspection underway – a positive surprise(DIVI IN, Mkt Cap USD3.6b, CMP INR834, TP INR720, 14% Downside, Neutral)According to media reports, the US FDA has been inspecting Divi’s (DIVI) Unit-2 plant since early last week. The plant was last inspected in Dec-16 and was issued an import alert in Mar-17. The current inspection thus comes as a positive surprise as it is happening within six months of the issuance of the import alert (v/s historical trend of 1...
​Divi's Laboratories: Regulatory issues impacted revenues(DIVI IN, Mkt Cap USD3.0b, CMP INR721, TP INR680, 6% Downside, Neutral)Revenues declined 18%YoY (~16% miss), while EBITDA of INR2.4b was 23% below our estimate. EBITDA margin contracted ~1010bpYoY to 29.8% due lower turnover and remediation expense related to import alert at unit II. PAT of INR1.8b (-42%YoY) was ~25% below our estimate. Sales was impacted by INR1.5b during the quarter due to time required for setting up protocols and pro...
​Divi's Laboratories: US FDA lifts 99-32 clause – a sentiment positive; But import alert under another clause remains(DIVI IN, Mkt Cap USD3.0b, CMP INR735, TP INR600, 18% Downside, Neutral) Divi's Laboratories (DIVI) has been informed by the US FDA that it will lift the import alert under clause 99-32 on the company's Unit-II at Visakhapatnam. The US FDA had issued an import alert under clauses 99-32 and 66-40 in March 2017, and then a warning letter in May for its Vishakhapatnam facility. ...
​Divi's Laboratories: Impact of import alert to be visible in FY18(DIVI IN, Mkt Cap USD2.3b, CMP INR547, TP INR600, 10% Upside, Neutral)Revenues declined 3% YoY (~4% miss), while EBITDA of INR3.6b was 7% below our estimate due to lower-than-estimated gross margin of 60.4% (~200bp below est.). EBITDA margin contracted ~250bp YoY to 33.7% due to forex loss of ~INR290m. PAT of INR2.6b (-20% YoY) was ~10% below our estimate. Divis received an import alert at Unit-2 at end-March 2017, the impact of...
​DIVI'S LABORATORIES: Risks remain, but management expects losses to be restricted; Unit-1 inspection results key; buyback/special dividend as near-term triggers(DIVI IN, Mkt Cap USD2.4b, INR623, TP INR600, 4% Downside, Neutral)Key takeaways from our concall with DIVI’s management: Management expects revenue impact to be much lower: Although exposure to the US market from Unit-2 stands at ~22% of total sales, management expects revenue loss to be restricted to ~5% of total sales because of t...
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