DIL surges 52% in 8 days, nears all-time high on strong Q4 results

DIL shares rallied 10 per cent at Rs 954 in intra-day trade on the BSE in an otherwise weak market on Thursday. It was trading close to its all-time high level of Rs 1,125 touched January 10 this year.

In the past eight trading days, the stock has surged 52 per cent after the pharmaceutical company reported strong earnings for March quarter (Q4FY19). In comparison, the S&P BSE Sensex was up 1.5 per cent during the same period.

DIL reported more-than-doubled consolidated net profit at Rs 37 crore in Q4FY19, on account of tax credit of Rs 21 crore for the quarter. The company had posted a profit of Rs 16 crore in the previous year quarter.

Operational revenue during the quarter declined 5.6 per cent at Rs 92 crore against Rs 97 crore in the corresponding quarter of previous fiscal.

DIL generates major chunk of revenue from its subsidiary i.e. Fermenta Biotech, which contributes 96 per cent to its top-line, while rental segment contributes 4 per cent to its revenue.

Fermenta Biotech is the only manufacturer and supplier of Vitamin D3 (Cholecalciferol) in India and amongst the leading players globally. Apart from Vitamin D3, Fermenta also possesses expertise in integrated biotechnology solutions such as enzymes for antibiotic synthesis and other niche APIs.

For the financial year 2018-19 (FY19), Fermenta Biotech reported 57 per cent growth in net profit at Rs 113 crore, against Rs 72 crore in previous fiscal. EBITDA (earnings before interest tax depreciation and amortization) margin expanded 550bps to 39.8 per cent from 34.3 per cent.

Strong growth momentum in Vitamin-D3 API segments makes the management optimistic on the company’s near-to-medium term growth prospects.

At 12:00 pm, DIL was trading 9 per cent higher at Rs 945 on the BSE, as compared to 0.25 per cent decline in the S&P BSE Sensex. Around 5,346 shares changed hands on the counter on the BSE, the exchange data shows.