InvestorQ : How were the quarterly numbers of Divi’s Laboratories in the third quarter?
Archita Jajjoo made post

How were the quarterly numbers of Divi’s Laboratories in the third quarter?

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Niti Shenoi answered.
3 months ago
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Despite operating in the active pharma ingredients (API) space, which is under a lot of pressure due to pricing, Divi’s Labs gave very good show in the third quarter. In fact, Q3 has been another stellar quarter for Divi with the bottom line nearly doubling on a yoy basis. That is largely due to the focus of Divi’s Labs on the more specialized niche in APIs which are not as price sensitive and not so cyclical. Here is a gist of the Divi’s Labs story in numbers.

Divi's Laboratories

Rs in Crore

Dec-21

Dec-20

YOY

Sep-21

QOQ

Total Income (Rs cr)

₹ 2,493.24

₹ 1,701.44

46.54%

₹ 1,987.51

25.45%

Operating Profit (Rs cr)

₹ 1,017.27

₹ 623.03

63.28%

₹ 740.72

37.34%

Net Profit (Rs cr)

₹ 902.24

₹ 470.62

91.71%

₹ 606.46

48.77%

Diluted EPS (Rs)

₹ 33.99

₹ 17.73

₹ 22.84

Operating Margins

40.80%

36.62%

37.27%

Net Margins

36.19%

27.66%

30.51%

For Dec-21 quarter, Divi's Laboratories reported 46.5% higher sales revenues at Rs.2,493 crore. Divi’s Laboratories saw traction across all its key segments in the global markets. Revenues were up by 25.45% sequentially. Despite the pressure on generic API markets globally, the company did well in the quarter, unlike the API franchises of other generic companies. That is because, specialized APIs business of Divi’s Laboratories is largely immune to the pricing pressures. More than 85% of the business comes from exports.

Operating profits for the third quarter were 63.28% up at Rs.1,017 crore. Sequential growth of 37.34% in operating profits shows strong revival momentum. Divi also put in place efficient cost controls at the company, apart from top line growth. Although the cost of materials rose 32% it was lower than the growth in sales realizations. Operating margins for Divi’s Laboratories improved from 36.62% to 40.80% in Dec-21 quarter on the back of cost and inventory efficiency. Operating margins were 453 basis points higher sequentially.

Net Profits increased 91.7% at Rs.902.24 crore on the back of robust operating performance getting transmitted to PAT. A major advantage is the extremely low levels of debt resulting in limited commitments in the form of finance charges. PAT margins improved sharply from 27.66% in Dec-20 quarter to 36.19% in Dec-21 quarter. In addition, the PAT margins were also higher on a sequential basis by a full 568 basis points.

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