Divi's Labs Q3 Results: Profit Falls 66%, Misses Estimates

Divi's Laboratories Ltd.'s third-quarter profit fell, missing estimates.

The company's net profit slumped 66% year-on-year to Rs 307 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 494-crore consensus estimate of analysts tracked by Bloomberg.

Sequentially, profit fell 38%.

• Revenue fell 32% to Rs 1,708 crore, compared to an estimate of Rs 1,937 crore.

• Operating profit declined 63% to Rs 408 crore, against a forecast of Rs 673 crore.

• Operating margins at 23.9% versus 44%. Analysts had estimated it at 34.7%.

• Its overall exports for the quarter stood at around 87%, out of which 69% was to regulated markets of the U.S. and Europe.

• The company's generic-to-custom synthesis revenue split is 60:40%.

• Revenues were down 14% on a constant currency basis.

• The company saw pricing pressure in generic, but volumes are improving. They are seeing improvement in generic pricing and expect it to improve further.

• There is no pricing pressure in contrast media.

• It has seen sea/air freight cost almost normalise and raw material supply issues and prices have stabilised. However, base price for lithium and iodine are high and the management expects this to continue.

• Overall capacity utilisation is at around 75%.

• The company has Rs 3,849 crore as cash in hand, as on Dec. 31.

• Divi's has two fast-track projects in its contract development and manufacturing business and sales should start from the first quarter of the next fiscal.

• The company has received the necessary government approvals for the Kakinada project in Andhra Pradesh and will proceed to develop the same. The company expects a total outlay of Rs 1,000 crore.

• The company is filing and has filed drug master documents for products close to expiry. However, it expects meaningful sales only from the 2024–25 fiscal.

Shares of Divi's Labs fell 8.91% on Friday after the quarterly results at 1.05 p.m., compared to a 0.75% rise in the benchmark Sensex.