Citi sees any sharp correction in Divi's Labs shares as a strong buying opportunity

Brokerage firm Citi suggests investors to take any correction in shares of Divi's Laboratories as an opportunity to lap up the stock, given that its its drug pipeline and thereby growth prospects, remain strong. Citi also highlighted other catalysts like opportunities emerging for Divi's in contrast media and GLP-1 segments, which further strengthens its case.

This comes after shares of Divi's Labs slipped 3 percent in Monday's session amid uncertainty over the passage of the US Biosecure Act in 2024. The Biosecure Act was kept out of a key defence bill, which suggests a potential softening of the US's stance on Chinese biotech. As the defence bill was the most viable path for the act's approval in 2024, its failure this year could have a negative, albeit sentimental, impact on Indian CDMO players.

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However, analysts at Citi are not too concerned as they believes that even while the passage of the Biosecure Act appears to have been delayed, its thesis remains intact. Biopharmaceutical companies will continue to look for diversification and will keep adding additional partners and suppliers," the brokerage wrote in a note.