Divi's Laboratories Ltd. during its earnings call said that the demand remains stable despite continued price pressure. The management said that the custom synthesis business continues to garner interest from several customers.

The management further added that it is not seeing any slowdown in opportunities going forward and that they are majorly working with only the big pharma compannies.

Hyderabad-based drugmaker Divi's Laboratories Ltd. reported a net profit of ₹348 crore, which turned out to be lower than the CNBC-TV18 poll of ₹410.8 crore.

On a year-on-year basis, the company's net profit declined by 29.5% from the year-ago period.

While Divi's revenue managed to meet expectations, its operating profit or EBITDA, as well as the EBITDA margin missed street expectations.

Revenue for the quarter stood at ₹1,909 crore, which was in-line with street expectations of ₹1,886 crore. The company's topline grew by 3% compared to the same period last year.

The range for revenue growth estimates for Divi's were wide, ranging from a decline of 5% to a growth of 7.4% year-on-year.

Operating profit or EBITDA declined by 22.9% from last year to ₹479 crore from ₹621 crore last year. The figure was well below the CNBC-TV18 poll expectation of ₹570.8 crore.

EBITDA margin narrowed by over 800 basis points to 25.1% from 33.5% last year. A CNBC-TV18 poll had projected the figure at 30.3%.

With regards to the custom synthesis business, the management said that the division is seeing strong growth after the pandemic and that big pharma remains a key growth engine for the business.

The management wrote off inventory worth ₹20 crore during the quarter, which pertains to some material left over from the Covid-19 days.

Shares of Divi's Laboratories have given up all their gains post the results announcement. The stock is currently trading 1.3% lower at ₹3,308.26.

First Published:Nov 6, 2023 12:41 PM IST