Sequential gains in Q4, improving earnings trajectory for Divi's Labs

Brokerages expect a sequential improvement in margins

The stock of Divi’s Laboratories is up 10 per cent over the last couple of trading sessions on expectations that the worst is behind and the company could see a sequential growth in the March quarter of the 2022-23 financial year (Q4FY23). The stock witnessed the highest downgrades among Nifty50 index stocks with earnings cuts over a third after the Q3FY23 results.

The company had posted a 32 per cent drop in revenues over the year ago quarter in Q3FY23 and 8 per cent sequentially, which was sharply lower than Street expectations. The decline was on account of muted custom synthesis