Why Did Shares of Divi's Lab Rally Today?

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Why Did Shares of Divi's Lab Rally Today?

Jun 10, 2021

Divi's Laboratories jumped 3.6% in intraday trade today after US-based pharmaceutical major Merck announced a supply agreement with the US government for the experimental Covid-19 drug, Molnupiravir.

As per the agreement, Merck, also known as MSD outside the United States and Canada, will procure the drug for the United States government and Divi's Laboratories will supply the active pharmaceutical ingredient (API) for the drug.

On 26 May 2021, Divi's Laboratories was selected by the company as an authorized manufacturer for the API of Molnupiravir.

Divi's Lab will supply the API to MSD's partners in India.

Molnupiravir is currently being evaluated in a Phase 3 clinical trial, for the treatment of non-hospitalised Covid-19 patients.

The US government has committed to purchase approximately 1.7 m courses of Molnupiravir upon issuance of emergency use authorization or approval by the U.S. Food and Drug Administration.

MSD is developing Molnupiravir in collaboration with Ridgeback Biotherapeutics.

--- Advertisement ---
3 Hidden Forces are Converging for the First Time Ever...

This convergence is going to unleash a once-in-a-generation wealth boom.

A wealth boom that could potentially mint countless new dollar millionaires as the stocks at the heart of this event return thousands of percent over the long term.

It's a story of ground-breaking consequences that cannot be ignored.

Our co-head of research, Tanushree Banerjee, is going to reveal all about this historic event on the evening of September 24.

Tanushree believes, those who invest in the companies at the heart of this event could turn a small stake into generational wealth.

Just head to this page to get more details about this historic event...
------------------------------

March quarter net profit rises 25% on low base

For the March 2021 quarter, Divi's Laboratories reported a 25% year on year (YoY) jump in net profit to Rs 4.9 bn against Rs 3.9 bn in the same period last year.

The company's total revenue also rose 20% YoY to Rs 17.4 bn from Rs 14.5 bn in the March 2020 quarter.

The company benefited from a low base as it was hit by the Covid-19-led national lockdown last year.

Consolidated Financial Results (in bn)

  Mar-21 Mar-20 YoY Change
Revenue 17.4 14.5 20%
Operating Profit 7 4.5 55.6%
Net Profit 4.9 3.9 25.6%
Source: Financial Results

The company has recently expanded capacities with an estimated investment of Rs 4 bn for fast-tracking a customs synthesis (CS) project.

A part of the project has been completed and is operational, it said, adding that the rest of the plan will be completed during the early part of the next financial year.

This unprecedented capex is an important narrative for the company as it will further augment its capacities and prepare it for growing opportunities arising from the China plus one strategy.

The impact of Divi's aggressive capex is already visible and is expected to fully reflect in 2023.

The Hyderabad-based company's board also recommended a final dividend of Rs 20 per share.

--- Advertisement ---
SPECIAL REPORT REVEALS: Real Estate Success Secrets of India's Most Respected Traders...

• A Secret 33-Year-Old Pattern That Has Just Remerged to Practically Guarantee a Massive Bull Run in Real Estate Over the Coming Years!

• The #1 Trend You Need to Know Before Investing in Real Estate This Year (Even if You Deal with Traditional Real Estate Investing and Have Nothing to Do with Stocks, this is a MUST KNOW)

• INVESTING IN COMA: Why People Who Invested in Real Estate Before 2019 Didn't Make Any Money (and Why Now is The Right Time to Get Started)

Here's How to Grab a FREE COPY Today
------------------------------

Highlights from call with analysts

The company's exports made up 90% of the sales for the quarter and 88% for the full fiscal.

The nutraceutical business contributed around Rs 1.6 bn to the March quarter revenue and Rs 5.9 bn to the annual revenue.

The company is operating at around 86% production capacity despite the pandemic's disruptions.

The second wave of Covid-19 has amplified logistical challenges and the company expects these challenges to continue.

However, it is confident of being able to mitigate procurement issues on account of significant investments made over past two years towards backward integration and by geographically diversifying supplier base.

Thus, it does not face any supply threats from China for raw materials.

Backward integration and constant introduction of latest technology have been key drivers for margin expansion and will continue to do so in the future.

REVEALED: Details of 3 "Super Smallcap" Stocks Nobody Tells You About...

How the stock markets reacted to the news

Shares of Divi's Laboratories opened higher at Rs 4,270 on the BSE and Rs 4,275 on the NSE today.

The stock rose over 3% in intraday trade after Merck announced the signing of the supply agreement.

The scrip also touched its 52-week high of Rs 4,426.9. It had touched its 52-week low of Rs 2094.6 on 2 July 2020.

In the past six months, the stock has gained 17.3% while in the last year, it has risen by 82.8%

About Divi's Laboratories

Divi's Laboratories is a leading manufacturer of APIs (Active pharmaceuticals ingredients), intermediates and registered starting materials in India.

The company has been established for more than thirty years in Hyderabad, India and is among the top pharmaceutical companies in the country.

It has over 14,000 highly trained professionals across departments and 350 scientists that work together to bring world-class products to customers.

The company recently reached the milestone of being one of the top 3 API manufacturers in the world and one of the top API companies in Hyderabad.

For more details about the company, you can have a look at Divi's Laboratories' factsheet and Divi's Laboratories' quarterly results on our website.

You can also compare Divi's Laboratories with its peers.

Divi's Laboratories vs Abbott India

Divi's Laboratories vs Sun Pharmaceuticals

Divi's Laboratories vs Aurobindo Pharma

Divi's Laboratories vs Cipla

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

PS: We would like to welcome you to the launch of Equitymaster's newest newsletter Breakout Wealth. Our top analysts will scan the internet for the most accurate investing ideas to empower you with opinions to help you make better investment decisions. The first issue is out tomorrow! Signup for free here...

Ayesha Shetty

Ayesha Shetty is a financial writer with the StockSelect team at Equitymaster. An engineer by qualification, she uses her analytical skills to decode the latest developments in financial markets. This reflects in her well-researched and insightful articles. When she is not busy separating financial fact from fiction, she can be found reading about new trends in technology and international politics.

Equitymaster requests your view! Post a comment on "Why Did Shares of Divi's Lab Rally Today?". Click here!

  

More Views on News

DIVIS LABORATORIES 2020-21 Annual Report Analysis (Annual Result Update)

Aug 12, 2021 | Updated on Aug 12, 2021

Here's an analysis of the annual report of DIVIS LABORATORIES for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of DIVIS LABORATORIES. Also includes updates on the valuation of DIVIS LABORATORIES.

DIVIS LABORATORIES Announces Quarterly Results (1QFY22); Net Profit Up 13.2% (Quarterly Result Update)

Aug 9, 2021 | Updated on Aug 9, 2021

For the quarter ended June 2021, DIVIS LABORATORIES has posted a net profit of Rs 6 bn (up 13.2% YoY). Sales on the other hand came in at Rs 20 bn (up 13.3% YoY). Read on for a complete analysis of DIVIS LABORATORIES's quarterly results.

DIVIS LABORATORIES Announces Quarterly Results (4QFY21); Net Profit Up 29.3% (Quarterly Result Update)

Jun 28, 2021 | Updated on Jun 28, 2021

For the quarter ended March 2021, DIVIS LABORATORIES has posted a net profit of Rs 5 bn (up 29.3% YoY). Sales on the other hand came in at Rs 18 bn (up 28.7% YoY). Read on for a complete analysis of DIVIS LABORATORIES's quarterly results.

5 Indian Pharma Companies Riding the Vaccination Wave (Views On News)

Sep 3, 2021

These companies are likely to benefit the most from Covid-19 vaccines.

Apollo Hospitals' Shares Rally Over 5%, Hit Record-High on Strong Results (Views On News)

Aug 16, 2021

The company reported a 73% YoY increase in revenue driven by an uptick in the hospital and pharmacy business.

More Views on News

Most Popular

All You Need to Know About Primary and Secondary Markets

A look at the various types of primary and secondary markets and the key differences between them.

Sansera Engineering IPO: Key Points to Consider (Views On News)

Sep 8, 2021

This IPO is a pure OFS and the company is looking to raise Rs 12.8 bn at the upper price band of Rs 744.

5 Stocks that Turned Rs 1 Lakh into Rs 1 Crore (Views On News)

Sep 7, 2021

Patience is one of the biggest virtues you need to have if you want to become a crorepati in the stock market.

The Top Stocks to Sell in this Bull Market (Profit Hunter)

Sep 8, 2021

When I saw the list of so-called 'value stocks' published by a leading brokerage, my worst fears came true.

5 Indian Companies that are Leading the AI Race (Views On News)

Sep 9, 2021

During the pandemic, India reported the highest increase in the use of AI at 45% compared to other major economies. AI has potential to add US$90 bn to the Indian economy by 2025.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2021
Get our special report Multibagger Stocks Guide (2021 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

DIVIS LABORATORIES SHARE PRICE


Sep 17, 2021 (Close)

TRACK DIVIS LABORATORIES

  • Track your investment in DIVIS LABORATORIES with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MORE ON DIVIS LABORATORIES

DIVIS LABORATORIES - SANDU PHARMA COMPARISON

COMPARE DIVIS LABORATORIES WITH

MARKET STATS