Buy Divis Labs; target of Rs 1218: Firstcall Research

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26 Aug, 2025 12:21

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Firstcall Research is bullish on Divis Laboratories and has recommended buy rating on the stock with a target of Rs 1218 in its December 21, 2012 research report.
 
“Divis Research Center (Divis laboratories ltd) established in the Year 1990. Starting as a Research Center and focused on developing new process for the production of Active Pharma Ingredients and Intermediates. The years spent as a research center helping many companies with its turn-key and consulting strengths went a long way in choosing the right areas to enter for manufacturing, and established its first manufacturing facility in 1995 for manufacturing quality products and changes its name to Divis Laboratories Limited from Divis Research Center. Divis has triple Certifications ISO-9001 (Quality Systems), ISO-14001 (Environment Management Systems) and OHSAS-18001 (Occupational Health and Safety systems) for its manufacturing facilities and adheres to cGMP and standard operating practices in its manufacturing/operating activities and these certifications are renewed from time to time.”
 
“All the manufacturing sites have been inspected by US-FDA, barring the recently implemented DSN SEZ Unit which expectes an inspection next year. Divis has a total of 36 drug master files (DMFs) with USFDA and 190 EDMFs and 13 CoS (Certificates of Suitability) with various European Union authorities. Divis has filed a total number of 22 patents in India and 17 in USA for generic products.”
 
“Divis Research Center (Divis Laboratories Ltd) starting as a Research Center and focused on developing new process for the production of Active Pharma Ingredients and Intermediates in India, reported its financial results for the quarter ended 30th Sep, 2012. The second quarter witnesses a healthy increase in overall sales as well as profitability of the company. The company’s net profit jumps to Rs.1179.70 million against Rs.1060.50 million in the corresponding quarter ending of previous year, an increase of 11.24%. Revenue for the quarter rose 29.42% to Rs.4737.40 million from Rs.3660.60 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.8.89 a share during the quarter, registering 11.16% increase over previous year period. Profit before interest, depreciation and tax is Rs.1734.60 millions as against Rs.1489.50 millions in the corresponding period of the previous year.”
 
“At the current market price of Rs 1078, the stock P/E ratio is at 21.36 x FY13E and 17.66 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.50.47 and Rs.61.04 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 28% and 23% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 15.15 x for FY13E and 12.62 x for FY14E. Price to Book Value of the stock is expected to be at 5.45 x and 4.59 x respectively for FY13E and FY14E. We recommend ‘BUY’ in this particular scrip with a target price of Rs 1218 for medium to long term investment,” says Firstcall Research report.

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