Divi's Labs Q4 Review - Strong Operating Performance Continues, Cash Compounding Story: Dolat Capital
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Dolat Capital Report
Divi's Laboratories Ltd.'s Q4 was a beat on margins and profit after tax despite an in-line revenue growth of 29% YoY.
Generic/ carotenoids business recorded 46%/83% YoY growth respectively with gross margin expansion driving profitability.
Custom synthesis while on a YoY basis de-grew (muted since past three quarters), the order book remains strong.
De-bottlenecking of units, backward integration, efficient technologies led to gross margin expansion of 730 basis points at 67.5%, down 150bps QoQ, as input costs of few key starting materials have risen.
Ebitda margins came in at 40% versus our expectation of 38% (FY21 margins at 41%).
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