Divi’s labs Q4 results: Revenues, profits, capex, margins and dividend
Last updated: 03 Jun, 2021 | 11:00 am
Revenue and Net profit: Divi's Labs has reported strong revenue from operations of Rs. 1,788 cr (up 28% YoY) and Net Profit of Rs. 502 cr (up 29% YoY) growth in Jan-Mar 21 period. For FY21, the company’s revenue from operations stands at Rs. 6,969 cr (up 29% YoY) and net profit of Rs. 1,984 cr (44% YoY) growth. The surge in demand due to the ongoing pandemic led to strong topline and bottom-line growth.
Capex: During the financial year, the company took up another Capex project of Rs. 400 cr for fast-tracking a custom synthesis project. A part of the project is operational and the rest will be operational in the upcoming financial year.
Margins: EBITDA margin was up 810 bps YoY to 40.1% in March 2021 quarter from 32% in the same period last year. Gross margins also expanded to 67.5% from 62.9% in Q4FY20. This was due to lower employee costs, the new brownfield DC and DCV SEZ units, and the backward integration taken up by the company in FY20 becoming operational in FY21.
Dividend: The company's board proposed its highest dividend ever of Rs. 20 per share for FY21. At the current price of Rs. 4,226, dividend yield comes out to be 0.4%.
Conclusion: Divi’s Labs delivered strong results for this quarter and ended the financial year on a high. Sales increased due to high demand caused by Covid 19 and the margins improved due to strategic backward integrations and SEZ units. The future outlook remains positive too as the company is involved in large Capex projects which will immensely increase its production capacity and their benefits are set to kick in the next financial year. Divi also became an authorized manufacturer of Merck Sharp & Dohme's Molnupiravir API which is an experimental antiviral drug that could be used to treat Covid 19. They are allowed to supply this API to MSD's partners in India. However, some concerns remain with its legal battle still going on for the Kakinada plant which was supposed to be a Rs. 600 cr project for expanding production capacity.