Divi's Laboratories - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 4116; MCap: Rs. 109280 crore)

Divi's Laboratories reported a strong Q4FY21 performance. Q4 top-line was in-line with I-direct estimates whereas profitability was higher than expected amid better gross margin performance.

Q4FY21 Earnings Summary

- Revenues grew 28.7% YoY to Rs. 1788 crore (I-direct estimate: Rs. 1743 crore)

- EBITDA margins expanded 807 bps YoY to 40.1% (I-direct estimates of 39.0%) due to significantly better gross margin performance (up 458 bps YoY to 67.5%) and lower other expenditure. Subsequently, EBITDA grew 61.2% YoY to Rs. 716 crore (I-direct estimate: Rs. 680 crore)

- Net profit grew 29.3% YoY to Rs. 502 crore (I-direct estimate: Rs. 472 crore) in-line with strong operational performance.

More than strong quarterly performance, the important narrative for Divi's is its unprecedented capex plans to further augment capacities besides preparing for growing opportunities arising due to China plus one factor. It has earmarked an aggressive capex of ~Rs. 3700 crore [Rs. 1800 (existing plans) + Rs. 400 (custom synthesis blocks) + Rs. 1500 (greenfield Kakinada plant) crore], over and above ~Rs. 2000 crore spent in the last five years. Divi's remains a quintessential play on the Indian API/CRAMs segment with its product offerings and execution prowess.

We will be coming out with a detailed report soon.

Shares of DIVI'S LABORATORIES LTD. was last trading in BSE at Rs.4193.6 as compared to the previous close of Rs. 4116.5. The total number of shares traded during the day was 106927 in over 11120 trades.

The stock hit an intraday high of Rs. 4284.05 and intraday low of 4114. The net turnover during the day was Rs. 449204942.

Source : Equity Bulls

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