Divi's stock may underperform on valuations, near term growth concerns

Revenue of the contract research and manufacturing services player was down 21 per cent y-o-y

The stock of pharma major Divi’s Laboratories is down over 6.6 per cent over the last eight trading sessions. Given the sales miss in the June quarter and valuations that factor in earnings upsides over the next couple of years, the stock could remain under pressure in the near term.

Revenue of the contract research and manufacturing services player was down 21 per cent year-on-year (y-o-y). This is a fourth consecutive quarter of revenue decline due to a high base on account of a surge in Covid-related drugs in previous periods.

Sales in the quarter, at Rs 1,778 crore, were muted too,