Icon times
Divis Laboratories Q1FY22 Conference Call Highlights

Divis Laboratories Q1FY22 Conference Call Highlights

Published on 10 August 2021 .Views 4 .Comments 0
Share On

Financial Highlights

  • Revenue from Operations stood at 1961 crores from 1730 crores a 13% rise YOY & 10% rise QOQ
  • Expenses stood at 1109 crores from 1008 crores rising 10% YOY & 3% QOQ.
  • EBITDA stood at 888 crores from 717 crores rising 24% YOY & 20% QOQ
  • EBITDA Margin stood at 45% from 41% YOY rising 4% YOY & 4% QOQ due to lower overall cost of raw materials & inventory
  • Depreciation stood at 73 crores from 56 crores YOY due to ever increasing capex by the company
  • Other expenses stood at 238 crores from 193 crores YOY & 259 crores QOQ
  • Employee Cost has also risen Sequentially & Year on Year and stood at 216 crores
  • PAT stood at 557 crores from 492 crores rising 13%YOY & 11% QOQ
  • PAT margin stood at 28%, being flat YOY & QOQ with slightly higher employee cost & other expenses offsetting the YOY EBITDA margin difference

Business Highlights

  • Revenue bifurcation - Generic: Custom Synthesis: 50:50 mix
  • US, Europe account for 71% of Q1FY22 revenues for the company
  • Exports contribute ~89% of Q1FY22 sales
  • Forex gain of 19 crore in Q1FY22 has been made by the company
  • As per the management, Margins can be maintained on the back of backward integration, technology modernization, green chemistry and other efficiency measures.
  • Management has planned for six growth engines:
    • Established generics (market share of 60-70%; Growth guidance:10%)
    • Increasing capacity of existing generics (market share of 20-30%, target to get to 60-70% share)
    • Sartans APIs – Leverage the already developed key starting material for Sartans, which gives advantage on both cost and impurities
    • Contrast media – Entering other segments with innovators and anticipated contribution in two years
    • Two substance projects being fast tracked with long term contracts
  • New generics – The company has already developed large volume niche molecules whose patents are due to expire from FY23-25
  • The company is currently operating at 80% production capacity
  • Management guided for future growth of around 10-15%
  • Estimated tax for FY22 by the management: ~ below 25%
  • Divi’s capex to further augment capacities besides preparing for growing opportunities arising from China plus one factor (strategy to diversify into other countries along with China)
  • The company has been building capacities in a few more niche APIs as per the evolving demand scenario in the backdrop of ‘China opportunities
  • Strong R&D capabilities & India cost arbitrage along with IP adherence are some legacy strengths, which drive incremental assignments from MNCs as per the management
  • The company has earmarked an aggressive capex of 3700 crore [1800 crores (existing plans) + 400 crores (custom synthesis blocks) + 1500 crores (greenfield Kakinada plant crore], over and above 2000 crore spent in the last five years.
Attachments:
private article suscription area icon

You like to know more. We like that!

Please subscribe Model Portfolio Plan to get access of all premium model portfolio articles Only at Rs. 11,999.00/Year.

Please login to view this free article.

This blog is available only for logged in users, please register and get access to view this article.

Recently Uploaded


premium Premium
free Free
Chat on WhatsApp
Caret UP Arrow
InvestYadnya Support
Typically replies in minutes
InvestYadnya Support
Hi there
Welcome to InvestYadnya.
We are available to assist you on WhatsApp.
Please click on the button below to chat with us.
(10 AM to 7 PM IST)
16:10
Chat with InvestYadnya