scorecardresearch
This stock hit all-time high today; here's why

This stock hit all-time high today; here's why

The company reported a 24.4 per cent rise in its standalone net profit to Rs 487.93 crore for the quarter ended March 31, 2021, on account of robust sales. Profit in the year-ago period stood at Rs 391.80 crore

Representative Image Representative Image

Divi's Lab share rose 4 per cent to hit an all-time high of Rs 4,284.05 after the company reported better-than-expected earnings for the quarter ended March 2021.

The stock opened 1.88 per cent higher at Rs 4,194.00 against the previous close of Rs 4,116.50. Divi's Lab share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200 day moving averages.

However, the stock shed some of its early gains amid profit booking. It ended 1.87 per cent higher at Rs 4,193.60 on BSE. Market cap of the firm rose to Rs 1,11,326.90 crore.

The stock has gained 75 per cent in the last 12 months and risen 9 per cent since the beginning of this year.

For FY21, total income grew 24.7 per cent to Rs 6,861.14 crore from Rs 5,500.43 crore in the previous year. Net profit stood at Rs 1,954.72 crore against Rs 1,372.71 crore in the previous year.

The company reported a 24.4 per cent rise in its standalone net profit to Rs 487.93 crore for the quarter ended March 31, 2021, on account of robust sales. Profit in the year-ago period stood at Rs 391.80 crore.

Total income grew 19.8 per cent to Rs 1,741.24 crore in the March-ended quarter against Rs 1,452.76 crore a year ago.

During the financial year 2020-21, the company has capitalised assets of Rs 1,18,351 lakh, and an amount of Rs 71,062 lakh is carried forward as Capital Work-in-Progress at the end of the year.

"The new brownfield DC and DCV SEZ Units and the debottlenecking/backward integration programs taken up by the company during the last year, have become fully operational during the year. Modernization and up-gradation of wastewater treatment plants at the manufacturing sites have been implemented," the company said.

"During the year, we have also taken up another CAPEX program with an estimated investment of Rs 400 crore for fast-tracking a customs synthesis project. A part of the project has been completed and became operational and the rest of the CAPEX will be completed during the early part of the next financial year," it added.

Jefferies has a 'Buy' call on the stock with a target price of Rs 4,732 per share. It mentioned that EBITDA was impacted by COVID incentive payments of Rs 34 crore.

"The March quarter earnings beat estimates and multiple drivers will support business in FY22," Goldman Sachs said. The brokerage house has a 'Buy' call on the stock with a target price of Rs 4,530 per share.

"We reiterate our BUY rating supported by promising demand prospects and multiple growth levers: a) growth in existing molecules, b) new product additions, c) manufacturing efficiency, d) strong and established relationships with big Pharma companies in the CS segment and enhanced demand prospects in Nutraceuticals, and e) scale led cost advantages," said Motilal Oswal.

The Board of Directors of the company has approved a dividend of Rs 20 per share for the financial year 2020-21.