Hopes keep Divi's Labs stock elevated

Street hopes for quick resolution, even as import alert impacts biz

The performance of Divi’s Laboratories in the September quarter (Q2) was hit by import alerts issued by the US FDA (US drug regulator). All its key parameters declined for a third consecutive quarter. Its revenue was down 11 per cent, operating and net profit fell five per cent and eight per cent, respectively, during the period. Profitability, too, was below expectation.

Revenue at Rs 890 crore met the Bloomberg consensus expectation of Rs 883 crore but remediation efforts towards FDA issues took a toll on profitability. The delay in shipments due to additional protocols and procedures for exempted products also