Moneycontrol PRO
UPCOMING EVENT:Learn how to add equities to your portfolio through ETFs. Don’t miss the webinar on Oct 19, 11.30am. Register Now!

Buy Divi's Laboratories; target of Rs 1080: Axis Direct

Axis Direct is bullish on Divi's Laboratories has recommended buy rating on the stock with a target price of Rs 1080 in its research report dated October 03, 2017.

October 09, 2017 / 05:37 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Axis Direct's research report on Divis Laboratories


We are positively surprised on fast remediation by Divi’s followed by quick USFDA re-inspection. Form 483 observations issued in Dec’16 on Unit 2 facility (under Import Alert) have been confirmed as completed and resolved (EIR awaited) after USFDA re-inspection. We believe this could be due to large dependence of innovator/generic companies for key drugs on Divi’s. However, Divi’s has received another form 483 with 6 new observations (largely procedural as per the management).


Outlook


As some remediation activity is going on and with closure of Import Alert/EIR awaited, we expect earnings to start improving from end FY18/FY19. We increase FY19E EPS by 15%. With improved visibility on USFDA resolution, we raise multiple to its historical level (on strong chemistry skills/manufacturing excellence) upgrading Divi’s to BUY with a revised TP of Rs 1,080 (24x FY19E) vs. Rs 625 (16x FY19E) earlier.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

first published: Oct 9, 2017 05:37 pm

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark