DIVISLAB - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.4

🧬 Core Financial Health

Earnings Strength

EPS: ₹82.5 ➜ solid profitability; indicative of high-margin product mix

PAT growth: ₹589 Cr → ₹662 Cr ➜ QoQ growth of ~12.4%

Qtr Profit Var: +23% ➜ robust expansion trajectory

Return Metrics

ROE: 15.4% | ROCE: 20.4% ➜ strong capital deployment efficiency

Balance Sheet

Debt-to-equity: 0.00 ➜ debt-free ➜ low financial risk & interest burden

Dividend

Yield: 0.45% ➜ stable payouts, but primarily a growth-oriented stock

💸 Valuation Checkpoint

Indicator Value Commentary

P/E Ratio 81.0 very rich — more than double industry avg (34)

P/B Ratio ~11.83 (₹6,676 / ₹564) ➜ priced at a hefty premium

PEG Ratio –8.46 negative ➜ indicates anomalous or erratic earnings base

📉 Verdict: The valuation is steep — market clearly prices in future innovation and export resilience, but caution warranted unless growth accelerates further.

🧪 Business Model & Strategic Position

Global leader in APIs (Active Pharma Ingredients) & custom synthesis

Specialty in nutraceuticals, CRAMS, and regulated markets exports

Competitive Advantages

Process chemistry IP and complex molecule expertise

Regulatory compliance for USFDA & EU

Asset-light, export-heavy revenue model ➜ forex hedge & margin protection

📈 Market Sentiment & Technical Setup

FII ↑ 1.73% ➜ rising foreign conviction

DII ↓ 1.67% ➜ mild domestic trim — possibly profit-booking

RSI: 48.4 ➜ neutral zone — accumulation possible

MACD: –12.9 ➜ bearish crossover — short-term caution

Price above both DMA 50 & DMA 200 ➜ medium-term strength

✅ Suggested Entry Zone: ₹6,200–₹6,400 📌 Ideal for staggered entry on dips or broad sector weakness — avoid chasing near highs unless breakout confirmed

🧭 Long-Term Investment Perspective

📌 High-quality compounder suitable for

Long-term pharma portfolios targeting export scalability

Investors focused on low-leverage, R&D-driven models

🔍 Key Watchpoints

New plant approvals & regulatory filings

Expansion into biologics & novel delivery platforms

Dollar revenue trends & margin sustainability

Would you like to compare Divi’s with peers like Laurus Labs or Suven Pharma to find better valuation-to-growth plays? I can chart it out for quick reference.

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