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Divis Labs share hits 52-week high on strong Q2 earnings

Divis Labs stock opened with a gain of 5.01% at Rs 3399 against previous close of Rs 3237 on BSE

twitter-logoBusinessToday.In | November 9, 2020 | Updated 16:05 IST
Divis Labs share hits 52-week high on strong Q2 earnings
Divis Laboratories share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages

Share of Divis Labs hit 52-week high in trade today after the pharma firm reported a 45% rise in Q2 profit. Divis Labs share touched an intraday high of Rs 3461.8, rising 6.92%. The stock has gained 10.71% in the last 5 days.

The pharma stock opened with a gain of 5.01% at Rs 3399 against previous close of Rs 3237 on BSE. Divis Laboratories share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The share has gained 99.62% in one year and risen 83.86% since the beginning of this year.  In a week, the share has gained 11.37%. The firm reported a 45.63 percent rise in its Q2 net profit at Rs 519.59 crore due to strong sales.

The company had logged a net profit of Rs 356.78 crore in the corresponding period of the previous fiscal. Total income in Q2 rose to Rs 1,762.94 crore against Rs 1,492.60 crore for the same period a year ago.

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The company had near normal operations during the quarter, the filing said.

Macquarie has maintained its outperform rating on Divis Labs with a target of Rs 3,910 per share. The brokerage said the new capex of Rs 400 crore and resolution of Kakinada Logjam strengthen growth outlook. adding that it was well placed to accept opportunities from higher pharma outsourcing to India. The brokerage has raised FY21-23 EPS estimates by 1-6 percent. The company is an attractive play on pharma outsourcing tailwinds for CRAMS and API segments, it said.

Research firm Jefferies has upgraded the pharma stock to buy and raised the target price to Rs 3,772 from Rs 3,159 per share. It said the company's EBITDA was a beat driven by sustained revenue and higher gross contribution, The research firm has upgraded FY21/FY22 EPS estimates by 14 percent/14 percent respectively.

Motilal Oswal has given a buy call on the pharma stock with a target price of  Rs 3900. The brokerage is positive on robust chemistry skill sets, strong business visibility ahead of  capital expenditure and consistently superior return ratios.

Yash Gupta, Equity Research Associate at Angel Broking said, "The firm has reported a very strong set of numbers. It has capitalised assets worth Rs 615 crore in Q2FY21 along with this company will be taking a new capex of Rs 400 crore for meeting new business opportunities. This is a very positive development for the company."

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