Divi’s Lab rallies 10% as Q2 results beat estimates

NEW DELHI: Divi’s Laboratories rallied a little over 10 per cent in morning trade on Monday, after the drug firm reported a 73.71 per cent rise in its net profit at Rs 204.93 crore for the second quarter ended September 30.

The company had posted a net profit of Rs 117.97 crore during the same period in the previous fiscal year.

Analysts polled by ET Now had estimated the drug firm to report a net profit of Rs 152 crore and net sales of Rs 535 crore for the quarter ended September 30.

At 10:40 a.m.; Divi’s Laboratories was trading 8.2 per cent higher at Rs 1104. It has hit a low of Rs 1051.20 and a high of Rs 1123.15 in trade today.

SBICap Securities retains their ‘buy’ rating on the stock with a revised target price of Rs 1367 which represents over 30 per cent upside from current levels.

Trailing underperformance, potential growth catalyst and inexpensive valuation drive our Buy, the brokerage firm said in a note. “We continue to find 25%+ earnings growth (F13-16e), over 24 per cent upside seen in RoE with stable business model attractive,” added the report.