Founded in 1990, Divis Laboratories Ltd is a prominent player in the pharmaceutical industry, specializing in the manufacturing and export of Active Pharmaceutical Ingredients (APIs), Intermediates, and Nutraceutical ingredients. With a focus on innovation and quality, Divis Labs has carved a niche for itself in the global pharmaceutical market. The pharmaceutical industry is crucial not only for providing essential medications but also for driving advancements in healthcare worldwide. In India, Divis Laboratories Ltd is a prominent player in the pharmaceutical indicating strong investor confidence and market performance.
Beyond the numerical projections, this article delves into the intricate dynamics of the pharmaceutical market, the company’s stellar performance, and the broader economic landscape. It ponders whether Divis Laboratories Ltd can realize its ambitious price target of 10k, considering various factors influencing its growth trajectory.
About Divis Laboratories
Founded in 1990, Divis Laboratories Ltd is a pioneering company in the pharmaceutical industry, specializing in the manufacturing and export of Active Pharmaceutical Ingredients (APIs), Intermediates, and Nutraceutical ingredients. With a global footprint spanning over three decades, Divis Labs has established itself as a reliable partner for pharmaceutical and nutraceutical companies worldwide.
Divis Labs operates state-of-the-art manufacturing facilities in Telangana and Visakhapatnam, equipped with cutting-edge technology and adhering to stringent quality standards. These facilities boast a diverse product portfolio, including generic APIs, custom synthesis of APIs and intermediates, and nutraceutical ingredients.
The company’s commitment to innovation is evident through its robust research and development centers in Hyderabad and process development support centers at manufacturing sites. These centers focus on developing new compounds and enhancing existing processes to meet evolving market demands.
With a strong international presence, Divis Labs caters to markets across the globe, with key subsidiaries in the USA and Switzerland. Its revenue streams are diversified, with a significant portion derived from exports to Europe, North America, and Asia.
Looking ahead, Divis Laboratories is poised for further growth with strategic investments in new manufacturing sites and emerging technologies. By staying at the forefront of innovation and maintaining a steadfast commitment to quality, the company aims to continue its legacy of excellence in the pharmaceutical industry.
Divis Laboratories Q3 Fy2024 Key Points And Summary:
- Divis Laboratories achieved a consolidated total income of Rs. 1,950 crores for Q3 FY2024, compared to Rs. 1,821 crores in the same quarter last year. The total income for the immediate previous quarter, Q3, was Rs. 1,995 crores.
- Material consumption for the quarter decreased to 39% of revenue due to a favorable product mix and softening of raw material prices.
- The profit before tax for the quarter amounted to Rs. 489 crores, with a profit after tax of Rs. 358 crores.
- Exports for the quarter remained steady at around 87%, with exports to Europe and America comprising about 71% of total exports.
- The product mix for generics to custom synthesis was 54% and 46% respectively for the quarter.
- Divis Laboratories reported a forex gain of Rs. 18 crores for the quarter, compared to Rs. 47 crores in the corresponding quarter of the previous year.
- Constant currency growth for the quarter stood at 7%, while it was negative at 10% for the 9-month period.
- The nutraceutical business generated revenue amounting to Rs. 153 crores for the quarter.
- For the 9-month period of FY 2023-24, the consolidated total income was Rs. 5,804 crores, with a profit before tax of Rs. 1,450 crores and a profit after tax of Rs. 1,062 crores.
- Divis Laboratories capitalized assets worth Rs. 77 crores during the quarter and Rs. 202 crores for the 9-month period. The capital work in progress, inclusive of advances, stood at about Rs. 712 crores at the end of the quarter.
Divis Laboratories Share Price Target 2024 To 2030
Divis Laboratories Share Price Target 2024
| Month | Maximum Price (₹) | Minimum Price (₹) |
|---|---|---|
| March 2024 | ₹3,978.50 | ₹3,459.57 |
| April 2024 | ₹3,862.62 | ₹3,358.80 |
| May 2024 | ₹3,805.54 | ₹3,309.17 |
| June 2024 | ₹3,942.54 | ₹3,428.30 |
| July 2024 | ₹3,903.12 | ₹3,394.01 |
| August 2024 | ₹4,059.24 | ₹3,529.77 |
| September 2024 | ₹4,221.61 | ₹3,670.97 |
| October 2024 | ₹4,138.83 | ₹3,598.99 |
| November 2024 | ₹4,263.00 | ₹3,706.96 |
| December 2024 | ₹4,369.57 | ₹3,799.63 |
In 2024, the price trends of Divis Laboratories shares reveal a noteworthy pattern. Throughout the year, both the maximum and minimum prices exhibit a predominantly upward trajectory, indicating positive performance and investor sentiment toward the company.
Starting from March with a maximum price of ₹3,978.50 and a minimum price of ₹3,459.57, the prices steadily climb, reaching their peak by December at ₹4,369.57 for the maximum and ₹3,799.63 for the minimum. Despite occasional fluctuations, possibly reflecting market volatility or changing investor sentiments, the overall trend suggests growing confidence and value in Divis Laboratories’ stock.
Divis Laboratories Share Price Target 2025
| when | Maximum Price | Minimum Price |
| January 2025 | ₹4,456.96 | ₹3,428.43 |
| February 2025 | ₹4,571.25 | ₹3,516.34 |
| March 2025 | ₹4,749.52 | ₹3,653.48 |
| April 2025 | ₹4,656.40 | ₹3,581.84 |
| May 2025 | ₹4,520.77 | ₹3,477.52 |
| June 2025 | ₹4,724.21 | ₹3,634.01 |
| July 2025 | ₹4,631.58 | ₹3,562.75 |
| August 2025 | ₹4,774.82 | ₹3,672.94 |
| September 2025 | ₹4,941.94 | ₹3,801.49 |
| October 2025 | ₹5,070.43 | ₹3,900.33 |
| November 2025 | ₹5,197.19 | ₹3,997.84 |
| December 2025 | ₹5,327.12 | ₹4,097.79 |
In 2025, Divis Laboratories is expected to see a continued upward trajectory in its share price. Starting with a maximum of ₹4,456.96 and a minimum of ₹3,428.43 in January, the prices are projected to steadily increase throughout the year. By December, the maximum price is estimated to reach ₹5,327.12, while the minimum is expected to rise to ₹4,097.79. This consistent growth pattern suggests a positive outlook for the company’s performance and market sentiment. Investors can anticipate the share price to follow this upward trend, with the expected price likely to continue its ascent, reflecting Divis Laboratories’ strong position and potential in the market.
Divis Laboratories Share Price Target 2026 To 2030
| Year | Maximum Price (₹) | Minimum Price (₹) |
|---|---|---|
| 2026 | ₹5,593.48 | ₹3,915.43 |
| 2027 | ₹6,152.82 | ₹4,306.98 |
| 2028 | ₹8,613.95 | ₹4,306.98 |
| 2029 | ₹7,457.97 | ₹3,728.98 |
| 2030 | ₹9,695.36 | ₹6,786.75 |
In the coming years from 2026 to 2030, Divis Laboratories is anticipated to witness significant growth in its share prices. The maximum price is expected to rise steadily, reaching ₹9,695.36 by 2030, showcasing a robust upward trend. Conversely, the minimum price is also projected to increase over this period, albeit with some fluctuations, ultimately reaching ₹6,786.75 by 2030. These forecasts suggest a positive outlook for Divis Laboratories, indicating strong investor confidence and market performance. Investors may find these projections encouraging, indicating potential opportunities for capital appreciation and long-term investment gains in the pharmaceutical industry.
Divis Laboratories’s Financial Condition (Last 5 Years)
| Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | TTM | |
| Sales + | 4,946 | 5,394 | 6,969 | 8,960 | 7,768 | 7,493 |
| Expenses + | 3,072 | 3,568 | 4,102 | 5,075 | 5,397 | 5,534 |
| Operating Profit | 1,874 | 1,826 | 2,867 | 3,885 | 2,370 | 1,959 |
| OPM % | 38% | 34% | 41% | 43% | 31% | 26% |
| Other Income + | 154 | 186 | 57 | 112 | 344 | 328 |
| Interest | 5 | 7 | 2 | 2 | 2 | 1 |
| Depreciation | 169 | 186 | 256 | 312 | 343 | 370 |
| Profit before tax | 1,855 | 1,819 | 2,666 | 3,684 | 2,369 | 1,916 |
| Tax % | 27% | 24% | 26% | 20% | 23% | |
| Net Profit + | 1,353 | 1,377 | 1,984 | 2,960 | 1,823 | 1,383 |
| EPS in Rs | 51 | 52 | 75 | 112 | 69 | 52 |
| Dividend Payout % | 31% | 31% | 27% | 27% | 44% |
Over the past five years, Divis Laboratories has demonstrated steady growth in its financial performance, with notable fluctuations in certain metrics. The company’s sales revenue has experienced consistent growth, increasing from ₹4,946 crore in March 2019 to ₹7,768 crore in March 2023, before slightly declining to ₹7,493 crore in the trailing twelve months (TTM). This upward trajectory reflects the company’s ability to capitalize on market opportunities and expand its customer base.
However, alongside revenue growth, Divis Laboratories has also witnessed a corresponding rise in expenses, primarily driven by factors such as increased production costs and operational expenditures. Despite this, the company has managed to maintain a healthy operating profit margin (OPM) throughout the period, reaching as high as 43% in March 2022, before decreasing to 26% in the TTM. This indicates efficient cost management practices and operational efficiency.
Other income, including non-operational revenue streams, has shown variability over the years, peaking at ₹344 crore in March 2023. Meanwhile, interest expenses have remained relatively stable, reflecting the company’s prudent financial management and low debt burden.
Depreciation costs have increased gradually over the years, in line with the company’s investment in fixed assets and infrastructure to support its growing operations.
Profit before tax has shown an overall increasing trend, reaching its peak at ₹3,684 crore in March 2022, before decreasing slightly in the TTM to ₹1,916 crore. Net profit has followed a similar trajectory, with growth from ₹1,353 crore in March 2019 to ₹2,960 crore in March 2022, before declining to ₹1,383 crore in the TTM. Despite the recent decrease in profitability, Divis Laboratories maintains a respectable dividend payout ratio, reflecting its commitment to rewarding shareholders while balancing growth and sustainability. Overall, these financial indicators portray Divis Laboratories as a resilient and profitable entity with a promising outlook in the pharmaceutical industry.
FAQS
What is Divis Laboratories’ market capitalization?
Divis Laboratories’ market capitalization is ₹92,708 crore.
What is the current stock price of Divis Laboratories Ltd?
The current stock price of Divis Laboratories Ltd is ₹3,492.
What is the dividend yield of Divis Laboratories Ltd?
The dividend yield of Divis Laboratories Ltd is 0.86%.
What is the return on capital employed (ROCE) for Divis Laboratories Ltd?
The return on capital employed (ROCE) for Divis Laboratories Ltd is 19.4%.
What is the return on equity (ROE) for Divis Laboratories Ltd?
The return on equity (ROE) for Divis Laboratories Ltd is 14.9%.
What is the stock’s price-to-earnings (P/E) ratio?
The stock’s price-to-earnings (P/E) ratio is 67.1.
Should one invest in Divis Laboratories?
Investing in Divis Laboratories warrants careful consideration, given its current financial standing and market performance. With a current market price of ₹3,492, the company’s market capitalization stands at ₹92,708 crore. Notably, Divis Laboratories has maintained a consistent dividend yield of 0.86% and a return on capital employed (ROCE) of 19.4%. Additionally, its return on equity (ROE) is at 14.9%.
On the positive side, the company boasts a debt-free status and a healthy dividend payout, instilling confidence among investors. Its robust ROCE signifies efficient utilization of capital, reflecting positively on its operational efficiency and profitability.
However, investors should be mindful of its relatively high stock price-to-book value ratio of 7.25, indicating a potential overvaluation. This could pose risks in terms of future price corrections if the market perceives the stock as overpriced.
Comparing Divis Laboratories with its peers in the pharmaceutical industry, it demonstrates competitive financial metrics, including robust revenue growth and profitability. Nevertheless, investors should closely monitor factors such as raw material prices, regulatory compliance, market trends, and competitive dynamics before making investment decisions. A comprehensive analysis of the company’s performance, along with industry trends, is essential to make informed investment choices.
Leave a Reply