Prabhudas Lilladher's research report on Divi's Laboratories
Divi’s Laboratories (DIVI) Q2FY25 EBITDA was largely in line with our estimates led by higher custom synthesis (CCS) revenues (up 56% YoY). We expect GMs to improve led by better product mix and stable raw material prices. Mgmt. suggested that moderation of raw material prices, increasing RFP’s and commencement of some CDMO and contrast media contracts, will continue to aid revenues and margins. Our FY25E/FY26E EPS estimates broadly stands unchanged. We expect 26% EBITDA CAGR and PAT CAGR over FY24-27E.
Outlook
At CMP, stock is trading at 50x FY26E EPS. We Maintain our ‘Accumulate’ rating with revised TP of Rs6,000/share, valuing at 50x FY27E EPS.
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