Divi's Labs cash in on bullish sentiment, strong growth prospects

The second largest pharma player by market value is also expanding capacities to push earnings

Divi’s Laboratories, which has gained more than 14 per cent from August lows and trading near all-time highs, has also become the second-largest pharma player by market value. The Street’s high growth expectations from Divi’s CRAMS (contract research and manufacturing services) business comes at a time when generics players in the US are facing the heat of pricing pressure.

With the competitive intensity remaining high, pharmaceutical companies are likely to resort to more outsourcing to control costs, thereby benefiting players like Divi’s that focus on supplying active pharmaceutical ingredients (API) for niche generics. This segment is likely to continue growing, and