Earnings Highlights
Divi’s Laboratories reported a strong performance for Q4 FY24, beating analyst expectations across key metrics. The company’s net profit rose 23% year-on-year to ₹662 crore, surpassing CNBC-TV18’s poll estimate of ₹608.4 crore. Revenue for the quarter came in at ₹2,585 crore, up 12.2% from ₹2,303 crore last year, also slightly ahead of street expectations.
EBITDA stood at ₹886 crore, a jump of 21.2% compared to ₹731 crore in Q4 FY23. The EBITDA margin expanded to 34.27%, significantly higher than both last year’s 31.74% and the expected 31.90%. The operational outperformance was driven by a favorable product mix and recovery in export demand.
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Company Snapshot
Divi’s Labs is currently trading at ₹6,280 per share, with a market capitalization of ₹1.66 lakh crore. The company maintains a zero-debt balance sheet and holds a strong Altman Z score of 18.7, signaling excellent financial health. Return ratios remain robust, with ROCE at 20.4% and ROE at 15.4%.
The EPS for the quarter was ₹24.94, compared to ₹20.27 a year ago. While the 3-year profit growth is negative at -9.56%, the recent quarters have shown clear signs of turnaround, supported by stable operational margins and consistent export orders.
Shareholding and Analyst Outlook
Promoter holding remains steady at 51.9%. FIIs have increased their stake to 18.01%, and DIIs hold around 20.63%. Public shareholding declined marginally to 9.39%, reflecting rising institutional interest.
According to data from 29 analysts, sentiment remains mixed. Around 24% recommend a ‘Buy’, 14% rate it ‘Outperform’, while 24% suggest ‘Sell’. Despite this, the operational beat in Q4 may lead to upward revisions in outlook, especially if margin stability continues.
Also Read: APL Apollo Q4 FY24 Results: Net Profit Soars 72%, Margins Expand Sharply
Historical Context
Over the past few years, Divi’s Labs has demonstrated consistent operational margins. The company’s operating margin for FY24 stands at 31.7%, while net profit margin is 23.4%. Sales growth over the last 3 years was 1.47%, impacted by global headwinds, but recovery is evident with back-to-back quarterly growth.
Its book value per share is ₹564, and the current price-to-book value is 11.1x. The stock P/E is 76.1x, considerably above the industry average, signaling rich valuation pricing in future growth.
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