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Divi's Laboratories (BOM:532488) |
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Divi’s Laboratories
Established in the year 1990, Divi’s Laboratories has been focusing on CRAMS and is an established player in the custom chemical synthesis (CCS) and API/Intermediate segment. Around 50% of Divi’s revenues are derived from custom manufacturing for global innovator companies, while the balance is derived from generic exports where it derives strong economies of scale and competes globally.
Divi’s Labs posted decent performance in FY09 with revenues and net profits registering a 14.1% YoY and 19.9% YoY growth respectively despite the global economic slowdown. Exports contributed 93% of the total revenues. This was attributed to the company’s continued focus to work with global innovator companies developing compounds under custom synthesis, besides its strategic positioning on its range of generic products in the international market. The company added 9 products to its portfolio wherein 4 are generic APIs and intermediates and 5 are custom synthesis APIs and intermediates. The company has been undertaking various capex programs to cater to the CRAMS potential and this has also helped the company rake in strong revenues.
Divi’s is working with 20 of the top 25 global innovator companies on various custom manufacturing contracts, which are expected to boost the company’s revenues and margins going forward. Growth is expected to come from increasing volumes as well as commercialisation of late stage products. The company is also a market leader in its key products like ‘Diltiazem’, ‘Naproxen’ and ‘Dextromethorphan’, which are expected to grow at a steady pace over the next few years and drive its generic exports. Divi’s presence in peptides and nucleotides is also likely to benefit the company in the long run as both products involve high entry barriers due to complex chemistry skills.
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