Divi's Labs Q4 Review - Strong Operating Performance Continues, Cash Compounding Story: Dolat Capital

Brightly coloured pharmaceutical medication, including antibiotics, paracetamol, Ibuprofen and cold relief tablets (Photographer: Chris Ratcliffe/Bloomberg).

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%).

Click on the attachment to read the full report:

Dolat Capital Divis Laboratories Q4FY21 Result Update.pdf

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