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Neutral Divi’s Laboratories; target of Rs 2900: Motilal Oswal

Motilal Oswal recommended Neutral rating on Divi’s Laboratories with a target price of Rs 2900 in its research report dated May 22, 2023.

May 24, 2023 / 11:43 AM IST


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Motilal Oswal's research report on Divi’s Laboratories

DIVI delivered a better-than-expected performance in 4QFY23, driven by improved traction in the generic API segment. The Custom Synthesis (CS) business also reported a slow uptick in sales. We raise our earnings estimates for FY24/FY25 by 7%/6% to factor in 1) a scale-up in commercial contracts in the CS segment, 2) a reduction in the availability of high-cost raw materials, and 3) improvement in operating leverage.


We value divi at 30x 12M forward earnings to arrive at a TP of INR2,900.  While the outlook is improving across segments of CS and generic APIs on the back of new launches and sharp focus on cost minimization, the current valuation adequately factors in the earnings upside. Hence, we maintain our Neutral rating on the stock.

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Divi’s Laboratories - 22 -05 - 2023 - moti

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first published: May 24, 2023 11:43 am