Revenue seen at Rs23.432 million, PAT at Rs7.098 million

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Result date: 23rd May 2022
Recommendation: Reduce
Target Price: Rs3,720

Divis Laboratories (Divis) is expected to post a moderate performance during the March 2022 quarter on a sequential basis. This weakness will largely come from a sharp 32% sequential decline in Molnupiravir revenue. The company’s molnupiravir API exports declined from a monthly average of $40-45 million in the December 2021 quarter to approximately $20 million in February 2022, implying a 50% decline in monthly execution rate. While its Molnupiravir API export volumes have declined, its price has remained stable at USD 1,500/kg for the past 3 months. The company’s Molnupiravir API revenue could decline from approximately $105 million in the December 2021 quarter to approximately $70 million in the March 2022 quarter. As a result, overall Divis revenue will likely decrease by 6% sequentially (total revenue could increase approximately 31% from the prior year quarter).

Divis also experienced price pressure on two of its largest generic API products, the average price of naproxen (~40% of Divis generic API revenue) and dextromethorphan (~14% of Divis Generic API) down ~9% and ~15%, respectively, in FY22, which also impacted the growth of its core Generic API business.

Low revenues could lead to lower EBITDA as well as profit after tax (PAT) on a sequential basis.

Important management information to monitor:
New launch pipeline
Likely total contribution of new launches
Margin drivers in the future









million rupees

March 2022 estimates

Annual change

QoQ change
Revenue 23,432 31% (6)%
EBITDA 10,076 41% (8)%
Profit after tax 7,098 41% (21)%

Source: IIFL Research

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