Revenues seen at Rs23,432 million, PAT at Rs7,098 million

Divis Laboratories (Divis) is prone to submit muted efficiency within the March 2022 quarter on a sequential foundation. This weak point will largely stem from a pointy 32% sequential decline in Molnupiravir income. The corporate’s exports of Molnupiravir API have declined from a month-to-month common of USD40-45 million within the December 2021 quarter to ~USD20 million in February 2022, implying a 50% decline within the month-to-month run-rate. Whereas its Molnupiravir API export volumes have declined, its value has remained regular at USD1500/kg for the previous 3 months. The corporate’s Molnupiravir API income may decline from ~USD105 million in December 2021 quarter to ~USD70 million within the March 2022 quarter. Consequently, Divis’ general income will probably decline 6% sequentially (whole income may enhance ~31% over the year-ago quarter).

Divis has additionally seen pricing pressures on two of its largest generic API merchandise, with common pricing for Naproxen (~40% of Divis’ generic API income) and Dextromethorphan (~14% of Divis’ generic API income) being down ~9% and ~15%, respectively, in FY22, which has additionally impacted progress of its base generic API enterprise.

Weak income may result in decline in EBITDA in addition to Revenue After Tax (PAT) on a sequential foundation.

Vital administration insights to be careful for:

·         New launch pipeline

·         Seemingly full contribution from new launches

·         Margin drivers sooner or later

 

Supply: IIFL Analysis