Divi's Lab gains on bargain hunting

Divi's Laboratories rose 2.31% to Rs 783 at 10:25 IST on BSE on bargain hunting after a recent slump.

Meanwhile, the BSE Sensex was up 109.81 points, or 0.43%, to 25,916.91.

On the BSE, so far 2.97 lakh shares were traded in the counter, compared with average daily volumes of 90,758 shares in the past one quarter. The stock had hit a high of Rs 786.50 and a low of Rs 761 so far during the day.

The stock hit a record high of Rs 1,380 on 16 September 2016. The stock hit a 52-week low of Rs 745 on 26 December 2016. The stock had underperformed the market over the past 30 days till 26 December 2016, falling 33.86% compared with the 1.94% fall in the Sensex. The scrip had also underperformed the market in past one quarter, falling 42.20% as against Sensex's 8.56% decline.

The large-cap company has equity capital of Rs 53.09 crore. Face value per share is Rs 2.

Shares of Divi's Laboratories fell 33.28% in three trading sessions to settle at Rs 765.30 yesterday, 26 December 2016, from its close of Rs 1,147.10 on 21 December 2016.

The recent slump was triggered by media reports of adverse observations from the US drug regulator made on its Vizag facility in Andhra Pradesh.

Shares of Divi's Laboratories slumped 21.87% to Rs 866.10 on Friday, 23 December 2016, following media reports of adverse observations from the US Food and Drug Administration (USFDA) made on its Vizag facility in Andhra Pradesh. Divis Laboratories is in the process of replying to the observations raised by USFDA. Due process of reply to these observations requires Divis Laboratories to respond in detail and this is being done in time, the company said in a response to the clarification sought by the stock exchanges on the steep fall. These observations have not impacted the company's operations, the company added. USFDA inspected the Unit-2 plant from 29 November 2016 to 6 December 2016 and issued a Form 483 with five observations pertaining to breaches in data integrity, improper controls and violations of current good manufacturing practices (cGMP). The company issued the clarification after market hours on Friday, 23 December 2016.

The stock fell 30.97% in two trading sessions to settle at Rs 765.30 yesterday, 26 December 2016, from its close of Rs 1,108.60 on Thursday, 22 December 2016.

Divi's Laboratories' net profit fell 24.6% to Rs 223.85 crore on 3.11% growth in net sales to Rs 991.82 crore in Q2 September 2016 over Q2 September 2015.

Divi's Laboratories is primarily engaged in the manufacture of active pharmaceutical ingredients (APIs) & intermediates for generics, custom synthesis of API's and advanced intermediates for discovery compounds for pharma giants, building blocks for peptides, building blocks for nucleotides, carotenoids and chiral ligands.

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