Divi’s Labs hits a new high

Divi’s Labs rose over 14% to Rs.1433.35, hitting a new 52-week high today as its Q2FY19 net profit almost doubled, following which fund houses and brokerages have upgraded the stock.

The company’s revenue for the quarter rose 44% (YoY) at Rs.1285 crore and this led to a 92% jump in net profit at Rs.398 crore.

There has been an overall increase in operational efficiency. Its EBITDA was up 85% at Rs.514 crore and margins rose from 31% to 40%.

The 138% jump in other income led by forex gain of Rs.53 crore also helped boost the bottomline.

With all issues with the US FDA also resolved, the company seems to be in a sweet spot. Equirus has upgraded the stock and raised the target from 1292 to Rs.1485. Axis Capital too has hiked the target price from Rs.1320 to Rs.1440.