ICICI Direct has given Buy recommendation for Divi’s Laboratories with a target price of Rs. 4440 in its research report issued on Feb 06, 2021
ICICI Direct’s research report on Divi’s Laboratories
Divi’s reported a strong Q3FY21 performance. Revenues grew 21.9% YoY to Rs 1701 crore (I-direct estimate: Rs 1770 crore). Generic segment grew 21% YoY to Rs 876 crore. Custom synthesis grew 18.9% YoY to Rs 681 crore. Carotenoids grew 45.0% YoY to Rs 145 crore. EBITDA margins expanded 525 bps YoY to 40.6% (I-direct estimates of 39.5%) due to significantly better gross margin performance (up 824 bps YoY to 69.0%) partially offset by higher staff costs. Subsequently, EBITDA grew 39.9% YoY to Rs 691 crore (I-direct estimate: Rs 699 crore). PAT grew 31.1% YoY to Rs 471 crore (I-direct estimate: Rs 492 crore) in-line with strong operational performance
Outlook
Maintain BUY with TP of Rs 4440 (vs. earlier Rs 4425) based on 40x FY23E EPS of Rs 111.0.
For all recommendations report, click here