Divi's Lab hits new high as Chippada unit gets zero USFDA observations

Shares of Divi's Laboratories hit a new high of Rs 2,014, up 3 per cent on the BSE on Saturday, after the company's unit in Andhra Pradesh received zero ‘483’ observations from the USA’s health regulator. The drug firm's stock surpassed its previous high of Rs 1,994, touched on January 29, 2020.

“The company's Unit-II at village Chippada, Bheemunipatnam district, Andhra Pradesh has had an inspection by the US Food and Drug Administration (US-FDA) from 27 January, 2020 to 31 January, 2020,” Divis Lab said in a BSE filing.

The inspection has been concluded with no '483' observations, it said.

Meanwhile, the company's board of directors is scheduled to meet on Wednesday, February 5, 2020 to consider and approve un-audited financial results for the quarter and nine months ended 31 December, 2019 (Q3FY20).

“Divi’s Q3 results likely to remain subdued even though sales growth might look strong year on year. This is primarily due to suppressed gross margins from high cost Chinese inventory procured to meet additional demand. Our discussion with company suggests that the benefits of the ongoing integration on the several APIs would be visible from Q4,” analysts at BOBCAPS said in result preview.

In the past month, Divis Lab has outperformed the market by surging 10 per cent, as compared to 1.4 per cent decline in the S&P BSE Sensex.

At 10:16 am, the stock was up 2 per cent at Rs 1,997 on the BSE, against 0.21 per cent rise in the benchmark index. A combined 324,604 shares have changed hands on the counter on the NSE and BSE so far.