Expansions, clean track record helping Divi's Labs tap new opportunities

The current margin pressure will also get mitigated by tax benefits and operational efficiencies

Divi’s Laboratories, which is trading near the all-time high it scaled last month-end, is up over 20 per cent from August lows. The Street’s confidence stems from the company’s clean regulatory track record, and strong business prospects. With intensified competition and pricing pressure in the US markets, drug manufacturing majors are increasingly looking for outsourcing options to control costs. This offers huge opportunity for companies like Divi’s, which provide contract research and manufacturing services (CRAMS), a business that currently contributing about 40 per cent to the company’s topline. In the generics business too, Divi’s manufactures and supplies niche ingredients, which