Net profit of Divis Labs is likely to grow 11 percent to Rs 273.4 crore in October-December quarter from Rs 246.5 crore in corresponding quarter last fiscal. According to CNBC-TV18 poll, revenue may increase 19 percent to Rs 1011.6 crore against Rs 853 crore year-on-year.
Street will be squarely focused on commentary on 5 observations co received on its unit 2 by USFDA, inspected from Nov 29 to December 6. Analysts expect the observations to turn either into Warning letter or import alert. Unit 2 accounts for around 70 percent of company's revenue During the quarter, EBITDA is expected to grow 15.2 percent to Rs 371.3 crore in Q3 versus Rs 322.3 crore while margins may stand at 36.7 percent versus 37.8 percent (YoY).
Expectations# YoY will be aided by a favourable base # Q3FY16 revenue growth was only 7.7 percent YoY missing estimates of 20 percent growth # Margins will be in focus as the company’s margins should improve sequentially # Last quarter, the company accounted for the Rs 79 cr paid as bonus - hence margins should improve QoQ. But, margins could be impacted on account of remediation costs undertaken for Unit 2. The remediation costs will only be partially captured as it was Dec 6-7th on
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