Informist, Saturday, Nov. 9, 2024

By Narayana Krishna

HYDERABAD – Divi's Laboratories Ltd. on Saturday reported a net profit of INR 5.18 billion for the September quarter, on the back of a revenue of INR 23.02 billion. The net profit was up 51.5% on year and revenue up 23.2% on year.

Both the metrics were above analysts' estimates. Analysts had estimated Divi's Labs net profit at INR 4.7 billion and revenue at INR 21.9 billion. Sequentially, the company's net profit was up 20.5% and revenue up 11.6%.

The revenue growth for Jul-Sept was higher than the last nine quarters on year-on-year basis. The net profit growth was better than Apr-Jun, but lower than the Jan-Mar quarter.

The company made a foreign exchange gain of INR 290 million in the September quarter against INR 110 million gain a year ago.

For the Apr-Sept period, the company's net profit rose 38% on year to INR 9.48 billion, and revenue was up 21.3% on year to INR 43.56 billion.

Though the company did not give any reason for its better than expected performance, analysts had expected the company's earnings to be aided mainly by custom synthesis and generic active pharmaceutical ingredients business. Divi's Labs makes high value custom synthesis products, catering to Big Pharma companies across regions.

The company's earnings before interest, tax, depreciation and amortisation or EBITDA margin for Jul-Sept was 34.65%, up 603 basis points, as calculated by Informist based on the company's exchange filing. This was despite 35% on-year rise in its input costs to INR 9.53 billion. Analysts' estimates for EBITDA margin were between 28.2% and 31.6%. Divi's Labs has repeatedly said that it is working at maintaining its margin above 30%.

The company's total expenses for the quarter rose 12.3% on year to INR 16.72 billion. Other expenses declined by 3.3% on year to INR 3.23 billion. The tax outgo for the quarter was up 78% on year to INR 2.17 billion.

On Friday, shares of Divi's Labs closed at INR 5,949.85 on the National Stock Exchange, down 0.2% from the previous day. End

Edited by Ashish Shirke

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