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Divis Labs Falls 9% on Weak Operational Performance in Q3

Shares of Divis Laboratories slipped 9 per cent to Rs 4,751 on the BSE in Monday’s intra-day trade as the company’s earnings before interest, tax, depreciation and amortization (ebitda) margin contracted by 180 basis points year-on-year (YoY) to 41.5 per cent in September quarter (Q2FY22) due to higher other expenses/employee costs.

The stock of the pharmaceutical company had hit a 52-week high of Rs 5,425 on October 18, 2021. In comparison, the S&P BSE Sensex was down 0.11 per cent at 60,002 points at 09:39 am.

In Q2FY22, Divi’s Labs’ profit after tax (PAT) grew by 17 per cent to Rs 606 crore as against a PAT of Rs 520 crore in the corresponding quarter of previous fiscal. Revenues also grew 13.6 per cent to Rs 1,987 crore from Rs 1,749 crore in the year-ago quarter.

“The company delivered in-line Q2FY22 earnings led by strong offtake in the Custom Synthesis (CS) segment and ramp up in the Nutraceuticals segment. It has enough capacity to cater to upcoming demand of Molnupiravir”, Motilal Oswal Financial Services said in a result update.

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