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ICICI Direct Report
Divi's Laboratories Ltd.'s revenues were down 31.5% YoY at Rs 1707.7 crore. On the segmental front generics business increased 11.7% YoY to Rs 871 crore. Custom synthesis and nutraceuticals business revenues came in at Rs 686 crore and Rs 150 crore showing de-growth of 55.6% and 12.3%, respectively.
Gross margins for the period declined ~996 basis points over the previous year to 56.7%. The reason behind was change in the product mix and pricing pressure in generics. Ebitda de-grew 62.8% YoY to Rs 408.3 crore whereas Ebitda margins declined 2010 bps YoY to 23.9%. The impact was largely due to maintenance cost for old facilities. Adjusted profit after tax declined 37.8% YoY to Rs 306.8 crore. Higher finance cost and taxes led to such a decline.
On the generics front, Divi's is looking at opportunities from patent expiry in 2023-25 (~$20 billion addressable market).
Overall, we expect the performance in custom synthesis to weigh on sentiments for the next few quarters.
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