Divi’s Labs Delivers An In-Line Q3, Growth Outlook Intact: Dolat Capital 

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Dolat Capital Report

Divi’s Laboratories Ltd. reported an in-line Q3 driven by volume growth across the product portfolio.

While on a sequential basis the growth has come off a bit due to second wave lockdown in Europe, management remains confident of a robust FY22 driven by planned capex.

De-bottlenecking of units, backward integration, efficient technologies (implementation of greener chemistry) led to gross margin expansion at 69%, although management indicated nine months gross margin of 66-67% is sustainable as raw material costs of few key starting materials have risen.

Further, management is also confident of Ebitda margin expansion on a YoY basis despite incremental costs from newly commissioned capacities.

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