Divi’s Lab Robust performance continues - Maintain Buy ::Emkay

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Divi’s Lab

Robust performance continues - Maintain Buy

BUY

CMP: Rs 801                                       Target Price: Rs 927

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n     Divi’s Q1FY12 performance was above expectations with a) Revenue at Rs3.65bn (up 38% YoY); b) EBIDTA at Rs1.34bn (up 34% YoY)  & c) APAT at Rs1.03bn (up 23% YoY)

n     Revenues were driven by robust performance of the existing products in CSS (Custom Synthesis) and its Generics portfolio

n     EBITDA margin expansion was constrained due to change in product mix and overheads at the company’s new SEZ unit in Vizag which commenced operations form 1st Jun’FY12

n     Strong quarter – Re-iterate Buy with a target price of Rs927 on the stock (20x FY13 EPS of Rs46.3)