Divis Lab Q1 net surges on strong sales

Share of Divis Laboratories surged 13.47% to Rs 3,160 apiece on NSE after the drug makers fiscal first quarter to June 30, earnings performance bettered market expectation.

The company reported 80.61% rise in consolidated net profit at Rs 492.06 crore for June quarter 2020 mainly on account of robust sales. It logged a profit of Rs 272.44 crore in the year-ago same period

Total income stood at Rs 1,747.80 crore during the quarter under review as against Rs 1,193.20 crore in April-June 2019-20

The drug maker had a near-normal operations during the quarter and there was minimal impact due to COVID-19 pandemic
The gross margin also witnessed 190 basis points rise on year to 63% on a superior product mix and lower raw material cost. Ebitda was up by 78% on year to Rs 700 crore for the quarter

Divis Lab strong beat in Q1 is due to robust sales on volume growth and better realisations. Business outlook remains steady on positive industry tailwinds

Divi’s Lab share price have rose 65% so far in 2020. It has managed to topple drugmakers Aurobindo Pharma, Dr Reddy’s Laboratories and Cipla and emerged as the second most valuable listed drug maker

Going ahead looking at the current order book, encouraging management commentary in the Q1FY21 concall and positive pricing ahead we expect Divis to outperform strongly in the coming year ahead also.

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