Divis Lab records new 52-week high & a trillion-plus of market cap

Divi’s Laboratories, one of the largest active pharmaceutical ingredients (APIs) manufacturers in the world, gained more than 3 per cent per share on Thursday.

Divi’s has seen growth in Capex investments in FY20 to increase manufacturing capacity as per its expansion plan, including expenditure on R&D towards custom synthesis and drug research, with a total of Rs 1,800 crore. Fast track and other projects from the US & European Union region have contributed 71 per cent to their revenue in Q2FY21. The company expects sustainable orders going forward, more from the European Union than the US. There is another project of a greenfield Kakinada plant in the pipeline with an additional Rs 600 crore towards the Capex expenditure.

A strong performance was seen at the end of the quarter with double-digit growth in profits and sales. Net profit of Rs 519.59 crore was recorded, a hike of 45.63 per cent as against Rs 356.78 crore in the corresponding quarter of the last year. It registered a 40 per cent increase in the operating profit at Rs 754.78 as against Rs 537.59 in the corresponding quarter of the previous year. With 21 per cent growth in sales and at the same time, a decrease of 11 per cent in the cost of raw materials proved to be a good sign for positive sustainable cashflows.

Today, Divi’s Lab has crossed its 52-week high, which is now at Rs 3,847 per share. The price per share has witnessed an increase of more than 100 per cent over the year 2020. Now, with a market cap of more than 1 trillion, it has become one of the hottest pharma stocks to watch out for.