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Wednesday, January 08, 2025 | 02:52 AM ISTEN Hindi

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Growth worries to keep Divi's Labs under pressure in the near term

Valuations, too, are on the higher side, say brokerages

Lack of valuation comfort may limit gains in Divi's Laboratories stock
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While the company has enough land for expansion and is planning a Rs 2,000-3,000 crore capex plan over the next three years to set up new plants, the delay on the Kakinada expansion due to delay in government clearance is a dampener.

Ram Prasad Sahu Mumbai
The country’s second largest pharma company by market capitalisation, Divi’s Laboratories was the biggest loser among Nifty stocks shedding 6 per cent in trade on Tuesday. While its March quarter performance was robust, brokerages cut their earnings estimates sharply on concerns related to growth trajectory and valuations.  

Tushar Manudhane and Gaurang Sakare of Motilal Oswal Research have reduced their earnings per share estimates over the next two years by 11-14 per cent. They cite reduced sales of Covid-related products considering the low number of cases globally, gradual uptick in growth in the generics segment and delay in implementation of Kakinada

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