Divi’s Labs Reaches £ 1 Billion Market Cap; Inventory increased 103% this year

The stock had hit a record high of £3,832 apiece in early deals today, nearly 3% more than the previous deal, with a market cap of £1.01 trillion.

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Sun Pharmaceuticals Industries Ltd is the other pharmaceutical company to hit the milestone.

Investors have shopped into Divi’s Labs to improve the profit visibility of the aggressive Capax plan. The company saw strong demand for both active ingredients (API) and custom synthesis processes.

In anticipation of strong demand growth, the company has launched a capacity expansion plan that is expected to be completed by fiscal 2021 and will contribute to return on sales from fiscal 2022 onwards.

“We assume that Divi will benefit from the backward integration, the capacity expansion and the emerging opportunities in the area of ​​API and custom synthesis the company doesn’t. ” There are regulatory hurdles ahead, “broker Sharekhan said in a recent report, recommending a buy recommendation for the stock with a price target of £4,175 each.

Divi’s is in the middle of a recently announced £400 crore investment plan for the custom synthesis segment, supported by strong customer orders, particularly in the Europe region.

In addition, Divi’s also implements a £Investment plan for 1,800 crore, which includes the elimination of bottlenecks in existing plants and the construction of two new units

Divi’s has also started work on its green field facility in Kakinada with an investment from £1,500 crore with Phase I are expected to start operations in the next 18 months.

With this capacity expansion, analysts anticipate revenue and earnings to be expected to achieve solid CAGRs of 24% and 33% respectively in FY2020-23.

In September, the company’s sales rose 21% year over year £1,750 crore. Generics sales increased 23% while cost-synthesis sales increased 18%. Gross margin rose 820 basis points while profit rose 47% on £530 crore.

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