Custom synthesis drives earnings

11 Mar 2024
5 Min read 
  • Divis Laboratories reported lower-than-expected earnings in 3QFY24.
  •  Custom synthesis business showed improvement, driven by major contracts with innovator.
  •  API business was impacted by reduced pricing, but volume off-take partially offset the effect.
  •  Estimates for FY24/FY25/FY26 were cut due to pricing pressure, subdued performance in nutraceutical segment, and increased freight costs.
  •  Divis Laboratories is progressing well with CDMO opportunity for GLP-1 products and adding new molecules in API segment.
  •  Valuation adequately factors in a 29% earnings CAGR over FY24-26.
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