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    Divi's Labs profit jumps 26% but margin suffers on higher input costs

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    Divi's Labs profit jumps 26% but margin suffers on higher input costs


    Pharma major Divis Laboratories reported its first quarter earnings on Friday afternoon, wherein its profit rose 26 percent on YoY basis but came down 22 percent sequentially. Profit was also aided by lower tax outgo but the bigger concern the Street will see is on the margins front owing to high raw material costs.

    Pharma major Divi's Laboratories on Friday reported a 26 percent year-on-year (YoY) rise in consolidated net profit aided by lower tax outflow. Divi's Labs net profit came in at Rs 702 crore in the April-June 2022 quarter compared to Rs 557 crore in the same period a year ago. Sequentially, the profit dropped 22 percent compared to Rs 895 crore Divi's Labs had reported in the previous quarter.
    Divi's Labs revenue rose 15 percent to Rs 2,255 crore in the first quarter against Rs 1,961 crore in the year-ago period. The quarter-on-quarter (QoQ) revenue fell 10 percent to Rs 2,255 crore from Rs 2,518 crore it had garnered in the preceding quarter.
    A CNBC-TV18 poll had estimated revenue to come in at Rs 2,326 crore, rising by 19 percent, while the poll estimated profit to rise to Rs 688 crore.
    Divi's Labs margins, however, came in at 37.6 percent in the Q1FY23 quarter compared to 43 percent in the year-ago period. The margin was aided by a forex gain of Rs 56 crore against a gain of Rs 20 crore on a YoY basis. The pharma firm paid a tax of Rs 149.3 crore compared to Rs 257.4 crore on a YoY basis, which helped in profits.
    Shares of Divi's Labs were trading more than 5.5 percent lower on the BSE at Rs 3,725 apiece on the BSE in Friday's afternoon deals. The pharma stock is down more than 31 percent from its 52-week high price of Rs 5,425.
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