⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
DIVISLAB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | DIVISLAB | Market Cap | 1,60,681 Cr. | Current Price | 6,056 ₹ | High / Low | 7,078 ₹ |
| Stock P/E | 63.9 | Book Value | 578 ₹ | Dividend Yield | 0.50 % | ROCE | 20.6 % |
| ROE | 15.6 % | Face Value | 2.00 ₹ | DMA 50 | 6,311 ₹ | DMA 200 | 6,233 ₹ |
| Chg in FII Hold | 0.69 % | Chg in DII Hold | -0.50 % | PAT Qtr | 696 Cr. | PAT Prev Qtr | 557 Cr. |
| RSI | 38.9 | MACD | -105 | Volume | 1,46,902 | Avg Vol 1Wk | 3,24,103 |
| Low price | 4,942 ₹ | High price | 7,078 ₹ | PEG Ratio | -6.95 | Debt to equity | 0.01 |
| 52w Index | 52.2 % | Qtr Profit Var | 34.4 % | EPS | 94.7 ₹ | Industry PE | 29.0 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT rose from 557 Cr. to 696 Cr. (+34.4%), showing strong earnings momentum.
- Profit Margins: ROE at 15.6% and ROCE at 20.6% reflect healthy efficiency and profitability.
- Debt Ratios: Debt-to-equity at 0.01 highlights a near debt-free balance sheet.
- Cash Flows: Dividend yield at 0.50% provides modest shareholder returns while retaining growth capital.
💹 Valuation Indicators
- P/E Ratio: 63.9 vs Industry PE of 29.0, indicating premium valuation.
- P/B Ratio: Current Price 6,056 ₹ / Book Value 578 ₹ ≈ 10.5, showing expensive pricing relative to book value.
- PEG Ratio: -6.95, reflecting weak or negative growth expectations despite recent profit rise.
- Intrinsic Value: Estimated fair value around 5,500–5,700 ₹, making current price slightly overvalued.
🏢 Business Model & Competitive Advantage
- Divi’s Laboratories is a leading pharmaceutical company specializing in APIs and intermediates.
- Competitive advantage lies in scale, global client base, and strong R&D capabilities.
- Debt-free operations and consistent profitability provide resilience and long-term sustainability.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 5,500–5,700 ₹, closer to intrinsic value.
- Long-Term Holding: Strong fundamentals, global presence, and debt-free balance sheet make it suitable for long-term investors, though valuation is stretched.
✅ Positive
- Debt-free structure ensures financial stability.
- Strong quarterly PAT growth (+34.4%).
- Healthy ROE (15.6%) and ROCE (20.6%).
- FII holdings increased (+0.69%), showing foreign investor confidence.
⚠️ Limitation
- P/E ratio significantly above industry average, indicating overvaluation.
- P/B ratio of 10.5 shows expensive pricing relative to book value.
- PEG ratio negative, reflecting poor growth visibility.
📉 Company Negative News
- DII holdings declined (-0.50%), showing reduced domestic institutional support.
- Technical indicators (RSI 38.9, MACD -105) show bearish sentiment.
📈 Company Positive News
- Strong quarterly PAT growth from 557 Cr. to 696 Cr.
- FII holdings increased (+0.69%), reinforcing foreign investor confidence.
🏭 Industry
- Pharma industry PE at 29.0, much lower than Divi’s 63.9, suggesting relative overvaluation.
- Industry growth supported by global demand for APIs and outsourcing opportunities.
🔎 Conclusion
- Divi’s Laboratories is a fundamentally strong pharma company with debt-free operations and robust profitability.
- Valuation is stretched compared to industry peers, making current levels less attractive for fresh entry.
- Best suited for long-term investors with cautious entry around 5,500–5,700 ₹; accumulation strategy recommended for exposure to global pharma growth.
I can also expand on global API outsourcing trends to show how Divi’s Laboratories could sustain growth in the long run.