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Informist, Friday, May 16, 2025

By Anjana Therese Antony

MUMBAI - Long positions were added in the derivatives contracts of Divi's Laboratories ahead of its March quarter earnings Saturday. There is also optimism that measures introduced by US President Donald Trump's administration to reduce drug prices in the US will have limited near-term impact on Indian pharma players, who earn a big chunk from the world's largest economy. Premiums on call options of Divi's Labs that were 3-11% higher than the spot level increased while those on put strikes that were 1-9% lower than the market price tumbled, indicating near-term optimism on the stock.

Shares of Divi's Laboratories closed over 1% higher at INR 6,279.50 Friday on the National Stock Exchange. The stock was the second-biggest gainer in the Nifty Pharma index. "Bias is seen bullish as long as the stock sustains above INR 5,900-INR 6,000," a derivatives analyst at a domestic broking firm said. Shares of Divi's Labs rose again this week after they snapped a four-week rising streak last week. The stock has risen 4% in the last seven days and 9% in 90 days.

The highest addition of open interest in Divi's Labs was at INR 7,000 call and INR 6,300 put strikes. Premiums on INR 6,450-INR 7,000 call contracts increased 2-5% while those on INR 6,200-INR 5,700 put options fell 19-29%. Open interest in the May series of Divi's Labs rose almost 4% to 3.50 million and that in the June series increased nearly 18% to 219,000.

The company's financial growth in the March quarter would be driven by custom synthesis business and newly started contrast media sales. The drug maker is likely to report 15% on-year rise in its net profit to INR 6.1 billion and revenue is likely to grow 13% to INR 25.5 billion, according to the average of estimates from 10 brokerages. The custom synthesis business accounts for about 50% of the company's top line and the segment's growth is likely to offset the weakness in the second-biggest generic active pharmaceutical ingredients segment that accounts for 45% of total sales.

--Nifty 50 May closed at 25081.90, up 3.20 points; 62.10-point premium to the spot index

--Nifty 50 Jun closed at 25194.50, up 3.30 points; 174.10-point premium to the spot index

--Nifty 50 Jul closed at 25325.00, up 6.40 points; 305.20-point premium to the spot index

Hindustan Aeronautics, Bharti Airtel, Bharat Electronics, IndusInd Bank, Bharat Heavy Electricals, Titagarh Rail Systems, Reliance Industries, HDFC Bank, Tata Motors, State Bank of India, ICICI Bank, LIC Housing Finance, Adani Enterprises, Container Corp. of India, Bajaj Finance, BSE, Crompton Greaves Consumer Electricals, Infosys, Tata Power, and Dixon Technologies India were the most active underlying stocks Friday.  End

Edited by Ashish Shirke

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