Lack of valuation comfort may limit gains in Divi's Laboratories stock

Revenue growth prospects, however, remain strong driven by multiple factors

Topics
Divi's Laboratories | stocks | profit margins

Ram Prasad Sahu  |  Mumbai 

The stock of India’s second largest pharma company by market capitalisation, Divi’s Laboratories was down a tad on Monday despite better than expected operating performance. The flattish stock performance was on account of expensive valuations and worries of whether margins are peaking out.

At the current price, the stock is trading at over 40 times its FY23 estimates and factors in most of the near term upsides. While valuations are at a 75 per cent premium to the NSE Pharma index, they are also at a sharp premium to its own 5-year averages. Rahul Jeewani of IIFL ...

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, August 09 2021. 19:44 IST
RECOMMENDED FOR YOU
.