Divi’s Labs Q2 Review - Custom Synthesis, Nutraceuticals Drive Earnings Growth: Motilal Oswal
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Motilal Oswal Report
Divi's Laboratories Ltd. delivered in line Q2 FY22 earnings led by strong offtake in the custom synthesis segment and ramp up in the nutraceuticals segment.
It has enough capacity to cater to upcoming demand of Molnupiravir.
We reduce our FY22E/FY23E earnings per share estimate by 5%/2% to factor in moderation in generic active pharma ingredient prospects over the near to medium term and increased operating expense related to expanded capacity.
We remain positive on Divi's Labs on the back of:
strong demand in the custom synthesis segment,
continued cost efficiencies with enhanced backward integration, and
the Kakinada project being back on track.
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