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Divis Laboratories Ltd. Stock Analysis

Large Cap
Evaluated by 5952 users | BSE: 532488 | NSE: DIVISLAB |
Pharmaceuticals & Drugs
Divis Laboratories, established in 1990, manufactures Active Pharma Ingredients (APIs) and intermediates. Divis Laboratories focuses on developing new processes for the production of Active Pharma Ingredients (APIs) & Intermediates. The company in a matter of short time expanded its...
1. Right Stock
Very Good
2. Right Price
3. Right Time

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Divis Laboratories Ltd. has performed well in majority of the past ten years indicating its past ten year financial track record is very good
Value Creation
Value Creation Index Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 25.52%26.18%25.26%27.24%26.36%28.14%22.39%15.38%20.17%17.84%
Value Creation Index 0.700.820.740.880.820.940.540.060.390.23
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 1,3171,8642,1452,5323,1153,7764,0643,8914,9465,394
Y-o-Y Gr. Rt.-41.6%15.1%18.1%23%21.2%7.6%-4.3%27.1%9.1%
Adjusted EPS (Rs.) 16.1619.6422.3928.2232.2141.5240.9532.9149.4648.21
Y-o-Y Gr. Rt.-21.5%14%26%14.1%28.9%-1.4%-19.6%50.3%-2.5%
Book Value per Share (Rs.) 67.7480.2994.2111.63131.67161.73201.82223.2262.09275.38
Adjusted Net Profit 4295215947498551,1021,0878741,3131,280
Net Op. Cash Flow (Rs. Cr.) 3273384805578261,0381,1507769541,216
Debt to Cash Flow from Ops 0.070.160.070.030.030.040.030.080.110.03
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Divis Laboratories Ltd. should be analysed on a Consolidated basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 17%11.6%9.9%9.1%
Adjusted EPS 12.9%8.4%5.6%-2.5%
Book Value per Share 16.915.910.95.1
Share Price 26.3% 22.3% 52.7% 78.8%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 25.8626.5425.6727.4226.4828.322.5315.4920.3917.94
Operating Profit Margin (%) 38.0737.1438.0840.237.6737.6736.6433.0537.933.86
Net Profit Margin (%) 32.5527.9727.7229.5827.4529.1926.7422.4526.5523.72
Debt to Equity 0.010.030.010.010.010.010.010.010.020
Working Capital Days 250229270300297245268371309297
Cash Conversion Cycle 164162171179173156144154143155
Corporate Governance What do we look at?
Corporate Governance
Board Credentials
Promoter's holding
Transparency
Integrity
Entity Percentage Holding
Promoters 51.96%
Institutions 37.08%
Non-Institutions 10.96%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Divis Laboratories Ltd. and arrived at the following conclusion:

Past 10 year's financial track record indicates that Divis Laboratories Ltd. is a good quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Divis Laboratories Ltd.'s performance infers:

Divis Laboratories Ltd. earnings have grown by 8.4%, whereas share price has appreciated 22.3% CAGR over the past five years, indicating the company's share price is likely overvalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Divis Laboratories Ltd. share prices over the last 10 years. Here is what we found out:

Divis Laboratories Ltd. share price has appreciated 24.7% annually over the past ten years.

Divis Laboratories, established in 1990, manufactures Active Pharma Ingredients (APIs) and intermediates. Divis Laboratories focuses on developing new processes for the production of Active Pharma Ingredients (APIs) & Intermediates. The company in a matter of short time expanded its breadth of operations to provide complete turnkey solutions to the domestic Indian pharmaceutical industry.

With five years of experience, expertise and a proven track-record of

Divis Laboratories, established in 1990, manufactures Active Pharma Ingredients (APIs) and intermediates. Divis Laboratories focuses on developing new processes for the production of Active Pharma Ingredients (APIs) & Intermediates. The company in a matter of short time expanded its breadth of operations to provide complete turnkey solutions to the domestic Indian pharmaceutical industry.

With five years of experience, expertise and a proven track-record of helping many companies with its turn-key and consulting strengths, Divis Laboratories established its first manufacturing facility in 1995. Its manufacturing plant is built on a 300 acre site at Hyderabad. Its second manufacturing plant is located in Vishakhapatnam on a 314 acre site. It also has presence in New Jersey and Switzerland.

Both the facilities are primarily engaged in the manufacture of:

  • Active Pharmaceutical Ingredients (APIs) & Intermediates for Generics
  • Custom Synthesis of API's and Advanced intermediates for discovery compounds for pharma giants
  • Building blocks for Peptides
  • Building blocks for Nucleotides
  • Carotenoids
  • Chiral ligands

Company’s Unit-1 at Hyderabad was successfully inspected by the US FDA during September 2000, in April 2004 and in February 2008. Its Unit-2 at Visakhapatnam was successfully inspected by the US FDA during November 2006 and in April 2009. Divis also undertakes FTE/Contract Research on process development for discovering new compounds for leading MNCs across the world and partners with them for the supply of APIs. The company is global in its outlook and benchmarks its quality standards to the best in the world.

In April 2010, Divis Laboratories received letter of approval from the Development Commissioner, Visakhapatnam Special Economic Zone, for setting up and development of a new manufacturing Unit there for pharma ingredients with an estimated cost of project at Rs. 200 crore.

Business of the company:

Generics - Divis manufacture API's for the Generics. As a company Divis understand that sustained development is not possible without respecting IPR. Divis takes great care to ensure that its products or processes do not infringe valid patents.Divis is actively involved in developing alternate, patent non-infringing processes for APIs, for the inventors to manage late life cycle and leading generic drug manufacturers.

Intermediates - Divis supplies advanced intermediates for generic APIs that are already out of patent, as also for APIs which are about to enter generic status shortly. Here again, Divis has tie-ups with both original inventors and generic API manufacturers.

Protected Amino Acids - Divis has built up a strong base in the manufacture of BOC, FMOC and CBZ protected amino acids, the protecting reagents themselves, peptide condensing agents, totally synthetic, natural and novel unnatural amino-acids and oligopeptides.

Divis has invested heavily in knowledge, equipment and man-power to expand in this technology area which is sophisticated, challenging and of course rewarding. Currently, Divis is a major manufacturer of protected amino-acids.

Chiral Synthesis  -Divis has an established and proven expertise in stereo selective synthesis using chiral ligands, high yield resolutions using chirally active resolving agents, recovery of resolving agents and ligands, recycling of undesirable isomers, resolutions involving enzymes and manufacture of novel ligands like binol, binap and so on.

Carotenoids (Synthetic) and Nutraceuticals - Divis has succeeded in developing multistep total synthesis of important carotenoids like Apocarotenal, Betacarotene, Lycopene, Astaxanthin, Canthaxanthin etc.

Products:

Divis manufacture API's for the Generics. As a company Divis understand that sustained development is not possible without respecting to IPR. Divis takes great care to ensure that its product or processes do not infringe valid patents.

Divis is actively involved in developing alternate, patent non-infringing processes for APIs, for the inventors to manage late life cycle and leading generic drug manufacturers.

Following is the list of its products:

  • Bupropion Hbr
  • Bupropion HCL
  • Capecitabine
  • Carbidopa
  • Desloratadine
  • Dexlansoprazole /(R)-Lansoprazole
  • Dextromethorphan Base
  • Dextromethorphan HBr
  • Diltiazem HCL
  • Fexofenadine
  • Fosphenytoin Sodium
  • Gabapentin
  • Iopamidol
  • Irbesartan
  • Levetiracetam
  • Levodopa
  • Nabumetone
  • Naproxen
  • Naproxen Sodium
  • Nateglinide
  • Niacin
  • Phenylephrine HCL
  • Proguanil HCL
  • Quetiapine Fumarate
  • Risedronate Sodium
  • Sertraline HCL
  • Sibutramine HCL
  • Tamsulosin HCL
  • Telmisartan
  • Triprolidine HCL
  • Valacyclovir HCL
  • Valsartan
  • Venlafaxine HCL
  • VerapamiL HCL
  • Vigabatrin
  • Zolpidem Tartrate 

Milestones:

  • 1990 : Divis Research Center (DRC) established.
  • 1991-1993 DRC successfully develops several commercial processes for intermediates and bulk actives and supplies to manufacturing majors.
  • 1994 : Divis Research Center changes its name to Divis Laboratories Limited to reflect its growing area of operations and its plans to enter the manufacturing sector in the following year.
  • 1995 : Manufacturing Facility (Unit-1) at Choutuppal near Hyderabad starts operations.
  • 1997 : SGS-Yarsley of U.K certifies Divis Laboratories as ISO-9002 compliant.
  • 1999 : European Directorate gives a 'Certificate of Suitability' (CoS) for Naproxen produced at Divis Laboratories.
  • 2000 : US-FDA inspects Divis Laboratories successfully SGS-Yarsley of U.K awards Divis the ISO 9001 Certification SGS International AG of Switzerland awards Divis the ISO-14001 Certification (for its efficient Environment Management Systems).
  • 2001 : BVQI of London awards Divis the OHSAS-18001 Certification (for its Occupational Health and Safety Management Systems).
  • 2002 : Divis commences the setting up of its 2nd Manufacturing Facility (Unit-2) at Chippada near Visakhapatnam.
  • 2003 : Divis opens a new research center christened 'DRC-Vizag' for fundamental research in selected niche business core segments. 2003 : Went for IPO and listed on stock exchanges BSE, NSE and HSE.
  • 2004 : US-FDA inspects the Choutuppal (Unit-1) for a second time. No 483.
  • 2006 : US-FDA inspects the Visakhapatnam(Unit-2) for the first time.
  • 2008 : Third US-FDA inspection for Choutuppal(Unit-1).
  • 2008 : KFDA inspects the Visakhapatnam(Unit-2) for the first time.
  • 2009 : KFDA inspects the Visakhapatnam(Unit-2) for the second time.
  • 2009 : US-FDA inspects the Visakhapatnam(Unit-2) for the second time.
  • 2010 : Divis Laboratories received letter of approval for setting up and development of a new manufacturing Unit there for pharma ingredients

 Awards:

  • 2009 : Certified and Awarded for 'Best Green Belt Development' by A.P.Pollution Control Board on behalf of Government of Andhra Pradesh.
  • 2009 : SURAKSHA PURASKAR for the year 2008 by NATIONAL SAFETY COUNCIL NSCI SAFETY AWARDS.
  • 2008 : FINALIST CERTIFICATE by Golden Peacock Environment Management Award.
  • 2007 : UNNER-UP Under Scheme No 1 of the National Safety Awards 2006 by Govt. of India, Ministry of Labour and Employment National Safety Awards (N.S.A).
  • 2005 : National Award for Excellence Water Management 2005 by Confederation of Indian Industry (CII).
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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