DIVI'S LABS

Divi’s Labs witnessed major selling on its counter after it declared its Q4FY13 wherein it posted a set of disappointing numbers. Its consolidated net profit slumped 17% (YoY) at Rs.180 crore on a 8% decline in total income at Rs.665 crore.  A forex loss of Rs.8 crore did not help the bottomline. Bottomline was also impacted due to the higher tax outgo – taxation was at 23% in Q4FY13 compared to 20.2% in Q4FY12.  Due to continued shortage of power in Andhra Pradesh the company had to rely on purchased power which comes at a higher cost and that too dented the margins. Exports stood at 90% of the sales and of this, 76% was to North America and Europe.

During the year, the company's unit-II facility was successfully inspected by TGA, Australia (GMP), US Food & Drug Administration (USFDA) for Nutraceutical facility, USFDA for API site (pre-approval and Cgmp), Slovenian Medicines Agency (EU GMP inspection for 7 APIs0.  The company custom makes APIs and advanced intermediaries and that contributes more than 50% to its revenue. The performance of its SEZ in Vizag was not up to the mark but is expected to catch up in FY14 and it expects 50% of its revenue to come from this.