Share of Divi's Laboratories Limited has delivered 103.5 per cent return to its shareholders in the last 12 months. The share stood at Rs 2423.35 on July 29, 2020. It has zoomed to Rs 4,932.00 today, translating into gains of 103.5 per cent during the period. In comparison, Sensex rose 38.5 per cent in one year.
Rs 5 lakh invested in the share a year ago would have turned into Rs 10.17 lakh today.
The stock opened 0.4 per cent higher at Rs 4,912 against the previous close of Rs 4,892.45 on BSE. With a market capitalisation of Rs 1,29,814.14 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.
"The company had announced a capex of Rs 3700 crore in FY19 and has already capitalised Rs 1900 cr worth of expansion. Kakinada expansion faced resistance from locals but the matter is expected to be resolved soon which will be positive for the company," Jitesh Ranawat, Head Institutional Sales at Marwadi Shares and Finance Ltd, told BusinessToday.in.
"Also, the company has two niche products under development i.e Iopromide and Iohexol which could turn out to be niche opportunities for Divis. The stock is trading at 41x FY23E and one can look at buying the stock on dips for the long term as the prospective for the company looks good given the management pedigree and the scalable opportunities," he added.
According to MarketsMojo, the company has high institutional holdings at 37.16% and their stake has increased by 0.55% over the previous quarter.
Also, the technical trend has improved from Mildly Bullish on April 23, 2021, and the stock is technically in a Bullish range now and has generated 30 per cent return since then. Multiple factors for the stock are Bullish like MACD, Bollinger Band, KST, DOW and OBV. However, it noted that the valuation is very expensive right now.
The company reported a net profit of Rs 502.02 crore for the quarter ended March 2021. Profit in the year-ago period stood at Rs 388.23 crore. Revenue from operations grew 29 per cent to Rs 1,788.19 crore in the March-ended quarter against Rs 1,389.71 crore a year ago. The EPS has increased to Rs 18.91 in March 2021 from Rs 14.62 in March 2020.
"Revenues are expected to grow 9% YoY to Rs 1884 crore, mainly due to strong growth in Carotenoid segment. EBITDA margins are expected to remain healthy at 40%. Net profit is expected to grow 8.4% YoY to Rs 534 crore, in line with operational performance," ICICI Direct said in its earnings estimates for the Healthcare sector.
The brokerage house believes that the domestic growth is expected to be led by a lower base, recovery in acute segment growth and Covid-related product sales.
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