Divi's Labs Q3 Results: Profit Falls 66%, Misses Estimates

Divi’s Labs' third-quarter revenue fell 32% to Rs 1,708 crore.

<div class="paragraphs"><p>(Source: Unsplash)</p></div>
(Source: Unsplash)

Divi's Laboratories Ltd.'s third-quarter profit fell, missing estimates.

The company's net profit slumped 66% year-on-year to Rs 307 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 494-crore consensus estimate of analysts tracked by Bloomberg.

Sequentially, profit fell 38%.

Divi's Laboratories Q3 Key Highlights (YoY)

  • Revenue fell 32% to Rs 1,708 crore, compared to an estimate of Rs 1,937 crore.

  • Operating profit declined 63% to Rs 408 crore, against a forecast of Rs 673 crore.

  • Operating margins at 23.9% versus 44%. Analysts had estimated it at 34.7%.

Concall Highlights

  • Its overall exports for the quarter stood at around 87%, out of which 69% was to regulated markets of the U.S. and Europe.

  • The company's generic-to-custom synthesis revenue split is 60:40%.

  • Revenues were down 14% on a constant currency basis.

  • The company saw pricing pressure in generic, but volumes are improving. They are seeing improvement in generic pricing and expect it to improve further.

  • There is no pricing pressure in contrast media.

  • It has seen sea/air freight cost almost normalise and raw material supply issues and prices have stabilised. However, base price for lithium and iodine are high and the management expects this to continue.

  • Overall capacity utilisation is at around 75%.

  • The company has Rs 3,849 crore as cash in hand, as on Dec. 31.

  • Divi's has two fast-track projects in its contract development and manufacturing business and sales should start from the first quarter of the next fiscal.

  • The company has received the necessary government approvals for the Kakinada project in Andhra Pradesh and will proceed to develop the same. The company expects a total outlay of Rs 1,000 crore.

  • The company is filing and has filed drug master documents for products close to expiry. However, it expects meaningful sales only from the 2024–25 fiscal.

Divi's Labs Q3 Results: Profit Falls 66%, Misses Estimates

Shares of Divi's Labs fell 8.91% on Friday after the quarterly results at 1.05 p.m., compared to a 0.75% rise in the benchmark Sensex.