4 DIVISLAB share price target reports by brokerages below. See what is analyst's view on DIVISLAB share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
We downgrade our revenue estimates for FY21E by 5.9% to Rs. 60.3 bn due to downgrade in Customs Synthesis and Generics business due to no revenue guidance provided by the management. We introduce FY22E revenues at Rs. 72 4 bn. We downgrade our EBITDA margins by 160 bps to 34.4% for FY21E and introduce FY22E EBITDA margins at 36.2%. We downgrade our EPS estimates for FY21E by 10.1%to Rs. 55.1 while we introduce FY 22E EPS estimates at Rs. 71.3 respectively. We roll over our price target to Rs. 2071 based on 29x FY22E (5 year average one year forward PE) and maintain our “SELL” rating.
Maintain Buy with a revised PT of Rs 2,430: Divis is one of the few pharma companies which is in a sweet spot to capitalize on the opportunities in the API space. A strong run up in the API prices in the recent past is attributable to likely supply disruption from China (due to outbreak of the Corona Virus), a leading supplier of API’s globally and accounting for 20% of the global output. Further, in order to avoid disruptions going ahead, companies globally are evaluating alternate sources for procurement and this is likely to be a key positive for Divis. Also we expect the company to benefit from backward integration, an aggressive capex plan incurred in the past and outsourcing opportunities. Further The company does not have pending regulatory hurdles which is a key positive and offers visibility for growth going ahead. We expect the sales and PAT to grow CAGR 20% and 24% respectively over FY2020 –FY2022. At CMP, the stock is trading at a reasonable P/E multiple of 33x / 26.8x its FY2021E/FY2022E, which is lower than the long term historical average multiple. We Maintain Buy recommendation on the stock with revised PT of Rs 2,430.
Maintain Buy with marginally lower PT of Rs. 1,800: The stock is down by 13-14% from its high and is trading at 21.6x its FY2021E earnings. Although Q1FY2020 performance was below our estimates, we feel long-term growth is likely to remain healthy, led by aggressive capacity expansion plans to monetise opportunities in the U.S. and China. However, taking into account lowered OPM guidance, we have reduced our earnings estimates by 5%/6% for FY2020E and FY2021E,respectively. We expect the company to report sales and profit CAGRs of21% and 18%, respectively, during FY2019-FY2021E. We maintain our Buy rating on the stock with marginally lower PT of Rs. 1,800.
Lower margins, limited upside We downgrade our revenue estimates for FY20E/FY21E by 2.9%/3% due to downgrade in Customs Synthesis and Generics business. We downgrade our EBITDA margins by 190 bps/130 bps to Rs 36.2/ Rs 36.7 for FY20E/FY21E. We downgrade our EPS estimates for FY20E/FY21E by 5.1%/4.2% to Rs54/ Rs64.3 respectively. We downgrade our price target to Rs 1744 based on 27x FY21E and maintain our HOLD rating.
As per the management, Q4 margins were just a kind of aberration. The management continues to expect normalised margins, going forward. On the capex front, to further augment capacities besides preparing for growing opportunities arising due to China factor, the company has earmarked an aggressive capex of ~Rs 1700 crore, over and above ~ Rs 2000 crore spent in the last five years. Margins are also likely to get support from extensive backward integration, product mix and operating leverage. We ascribe a target price of Rs 1780 based on 26x FY21E EPS of Rs 68.4.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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