Buy Divi’s Laboratories, target price Rs 1230: Motilal Oswal

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Buy Divi's Laboratories, target price Rs 1230:  Motilal Oswal


Motilal Oswal has buy call on Divi’s Laboratories with a target price of Rs 1230. The current market price of Divi’s Laboratories Ltd. is Rs 3483.2.

Divi’s Laboratories Ltd., incorporated in the year 1990, is a Large Cap company (having a market cap of Rs 92413.59 Crore) operating in Pharmaceuticals sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 1720.76 Crore, down -2.39 % from last quarter Total Income of Rs 1762.94 Crore and up 19.67 % from last year same quarter Total Income of Rs 1437.93 Crore. Company reported net profit after tax of Rs 470.62 Crore in latest quarter.

Investment Rationale
The brokerage continues to value DIVI at 36x 12M forward earnings to arrive at TP of INR4,530. It reiterates Buy, encouraged by promising demand prospects and multiple growth levers – a) new product additions, b) a strong chemistry skill set, c) efficient manufacturing capabilities, d) scale-led advantage in legacy molecules, e) minimal financial leverage, and f) sufficient cash available for new projects


Promoter/FII Holdings
Promoters held 62.8 per cent stake in the company as of Dec 30, 2020, while FIIs held 12.8 per cent, DIIs 7.8 per cent and public and other 16.7 per cent.



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