Divi's Laboratories: Margins likely to remain subdued, say analysts

Margins to get better once supplies start from expanded capacities next year

Divi’s Laboratories has been one of the biggest gainers among the pharma pack since the start of April. The stock, which has gained 29 per cent, continues to trade near its 52-week high. The Street’s confidence was not misplaced as the company reported a steady March quarter performance. While revenue grew 9.7 per cent, the rise in net profit was sharper at 33 per cent year-on-year. However, the bottom line was also supported by lower taxes and forex gains.

The company reported improved gross margins led by better product mix, lower input costs and backward integration benefits for some critical raw