Divi’s Labs crosses Rs 1 trillion market capital value, stocks rally 103% in 2020

Pharma player, Divi’s Laboratories Ltd surpassed the Rs 1 trillion mark in market capitalisation on Thursday and became the second Indian pharmaceutical company to hit this mark as their market stakes have surged by more than 103% this year till date.

The share prices touched a bullish high of Rs 3,832 per share in early trade today, rallying up 3 percent from its previous close.

Sun Pharmaceuticals Industries Ltd is another pharma contender to hit these marks.

Investors have been investing heavily in Divi’s Labs, all thanks to strong earnings visibility via its aggressive CAPEX plan. The company has been noticing increased demands for both active pharmaceutical ingredients (API) and custom synthesis operations.

Sensing strong demands, the company has set out on a capacity expansion plan which is expected to be concluded by the Fiscal Year 2021 and would start its topline contribution by the Financial year 2022.

“We expect Divi’s to reap benefits of backward integration, capacity expansion, and emerging opportunities in the API and custom synthesis space. Strong earnings visibility, almost zero debt, and strong return ratios bode well from a growth perspective. Moreover, the company does not have any pending regulatory hurdles, which is a key positive”, said brokerage firm Sharekhan in a recent report.

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