DIVISLAB - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 20 Dec 25, 03:54 pm

Technical Rating: 3.6

📊 Technical Analysis

• Chart Patterns: Price (6,472 ₹) is above both 50 DMA (6,408 ₹) and 200 DMA (6,209 ₹), showing bullish alignment.
• Moving Averages: Positive bias with price sustaining above short-term and long-term averages.
• RSI: 47.6 → neutral zone, suggesting consolidation with room for upside.
• MACD: -35.5 → bearish crossover, indicating short-term weakness despite overall strength.
• Bollinger Bands: Price near mid-band, showing consolidation with potential breakout if volume rises.
• Volume Trends: Current volume (4.02 Lakh) is higher than 1-week average (2.29 Lakh), showing strong participation.

📈 Momentum & Signals

• Short-term Momentum: Neutral to slightly bearish due to negative MACD.
• Support Zones: 6,400 ₹ (near-term), 6,200 ₹ (200 DMA), 5,800 ₹ (major support).
• Resistance Zones: 6,600 ₹ (near-term), 6,800 ₹ (psychological), 7,078 ₹ (recent high).
• Optimal Entry: 6,400–6,200 ₹ range on dips.
• Optimal Exit: 6,600–6,800 ₹ range unless breakout above 7,078 ₹.
• Trend Status: Stock is consolidating with bullish bias; reversal possible if price sustains above 6,600 ₹.

✅ Positive

• Strong ROCE (20.6%) and ROE (15.6%) indicate efficient capital use.
• Debt-free balance sheet (Debt-to-equity 0.01).
• Quarterly PAT growth (696 Cr. vs 557 Cr.) with 34.4% profit variation improvement.
• EPS of 94.7 ₹ supports valuation strength.

⚠️ Limitation

• High P/E (68.4) compared to industry PE (30.6), indicating stretched valuation.
• MACD negative, showing short-term weakness.
• PEG ratio (-7.43) suggests poor growth prospects relative to valuation.

📉 Company Negative News

• FII holdings decreased (-0.35%), showing reduced foreign investor confidence.
• Stock trading below 52-week high (7,078 ₹), reflecting limited momentum.

📈 Company Positive News

• Strong quarterly PAT growth and margin expansion.
• DII holdings increased (+0.72%), showing domestic institutional confidence.
• Debt-free status supports financial stability.

🏭 Industry

• Industry PE at 30.6, much lower than company PE (68.4), suggesting Divis Labs trades at a premium.
• Pharmaceutical sector remains resilient with strong demand outlook globally.

🔎 Conclusion

• Stock is consolidating with bullish bias but short-term weakness due to negative MACD.
• Best entry near 6,400–6,200 ₹; exit near 6,600–6,800 ₹ unless breakout above 7,078 ₹.
• Long-term investors benefit from strong fundamentals, debt-free status, and consistent profit growth, but should monitor valuation risks.